Posted by Mitch_MD on 11/30/05 8:23am
Msg #79177

How long to legally keep docs?

I just got off the phone with an SA in Florida who had an interesting development, but I must first provide some background.

The SA I spoke with did a job for one of their top accounts over this past Thanksgiving weekend, whereby the client sent the original eDocs to the SA, the borrowers declined at the table, the client redrafted the docs a second time and *forgot* to include some forms. The SA noted the discrepancy, contacted the client, was told the missing docs didn't need to be a part of the second package and to go ahead with the second signing attempt. When they returned the completed set of second docs, the client threw a fit because the missing forms weren't there and tried to make the SA get the missing docs signed for free. Fortunately, the SA had documented everything (names, phones numbers, etc.), and still had all the eDocs available for further verification. After review, the client admitted the mistake was theirs and had the SA go back to the borrower for a third trip fee. Now here's where it gets interesting...

In a post-mortem phone call to the SA, the client requested the SA to begin doing the following :

1) Keep the entire loan package of each transaction for this client accessible on the SA's hard drive for a period of 30-days.

2) At the end of 30 days, archive the complete package to CD and wipe the data from the hard drive.

3) Keep the archived CD on hand *indefinitely*.

The reason the client gave the SA for this series of requests was accountability and a record of what was actually sent to the SA by the client, to be used for such a purpose as the one they had just gone through. The client supposedly said that loan packages were getting so messed up by other SA's that they were having to implement this policy to cover themselves.

MY question to all of you out there is this: Isn't this illegal according to the Sarbanes-Oxley Act? I understand wanting to have the SA keep the docs on hand until the loans fund and the SA gets paid, but do they really need to archive everything on CD *indefinitely*?

And, no, please do not ask me to name the respective parties here or offline.

Reply by Art_MD on 11/30/05 8:43am
Msg #79182

I'm not sure how the Sarbanes-Oxley act of 2002 affects this situation.

Thinking logically, which is not always the best thing to do when discussion rules and regulations, it comes down to how you define you limits/functions as a SA and your relationship with the T/C and your function as a Licensed Title Producer.

I believe IN MARYLAND we can legally keep the information on file. As I said, in Maryland. We are legally the title insurance producer and therefore, we are a party to, and an integral part of, the entire transaction. We can, wearing our LTP hat, keep records relating to title insurance we produced.
Since the title insurance is in effect as long as the borrower doesn't refi or sell, I think legally we could at least keep the files as long as the title insurance is in effect.

As to if you want to keep the files and use due diligence to protect the information, that would be your decision.

In other states I wouldn't think of trying to answer.

Reply by Mitch_MD on 11/30/05 9:26am
Msg #79184

Hmmm...

Hadn't considered the TIP aspect for us here in Maryland, but as I indicated, this info was from an SA down in the Sunshine State.

From my days of working in the IT department of a big company, my understanding of the Sarbanes-Oxley Act is that all client data is to be secured from prying eyes and that specific measures must be taken by *all* vendors large and small to protect that data. This includes keeping data out of the hands of anyone not authorized to have access, encryption when used with electronic devices, etc. However, I must admit, I couldn't find anything to specifically spell that out when looking for it just now on the web.

Reply by Anonymous on 11/30/05 10:14am
Msg #79208

The Notary Law in Florida makes it illegal for a notary to retain ANY copy of docs, that are notarized. But, I would not assume that keeping unsigned copies is legal. The statute is very vague and outdated. Unfortunately, Florida legislators need to update the notary law as it does not encompass the internet transmissions of legal docs. Technically, if you read the statute, it would lead you to believe that it's illegal for us to print them at all.

NEVER retain a copy of the borrowers docs. Print the file and then delete it as soon as the signing is completed. And never ever keep a copy of docs that the borrower signed.

Reply by NM_CO on 11/30/05 11:16am
Msg #79247

Anon is correct. Get rid of those docs.

Reply by Art_MD on 11/30/05 11:39am
Msg #79253

As I addressed in a previous reply, legally I believe we can legally keep docs almost indefinitely - IN MARYLAND. As to what an individual wants to do, that is up to them.

Art

Reply by Pandagirl28 on 11/30/05 12:39pm
Msg #79269

Well, I'm in Florida, and what I do is this. I make a file in my email for each closing that I do. All emails pertaining to that closing go in to that file. When I get my check for the closing, I delete that file. That way if I get a call saying that there are missing docs, I can go back and review what I was sent. Plus, it helps to remind me who hasn't paid yet!