sc13-2384 exhibit i (lavalle) - floridasupremecourt.org · sramped on tbe dan of rec.eipt an4 *pon...
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'iJ'i$ITED STATES DISTR.iC" COIIRTFOR THE OI $TR.}CT OF MASSaCHI,jSETTS
U\IIT'E} STATES G5' AMES.IC}'
Ftai*irfT,
Ph;inliffs,
ri".
FAIP}}NKS] {-'"{.FITAL COR}.,
Civil Rction No. I -03-CV-t 22 lg-DPw
Civil Action No. l-03-CV*108$1-D'*\1'
t .
DEfer;,iant.
qgHptgumr|iruI) AE}BAliur or. BR$NT n as[4ug$4,Itj, Brc$! Rasrnussen, being duly.sworn undcr oatr, do depose and state as follcws:
My namc is Srem Rasrnussen- I an Scpjor Vicc hesideil and Cbief laformarion Otlficcr
for Farrbanls Caprtal Corp. {"Fairbanks'). I have heli my prescnt positios since lvfay 12,
?C03. I rvas bired ar Failtarrks on Augusr 1, 2001 and served as nranagiag f,)irector of
.inforsascn. Teciuirrlogy unrtl August 31. 2{i01,'n'hen I becerne Vice Frcsrdent of
lnltrrmaricn Technology ritt;l I ass$med my Freedut position.
EXHIBIT IFI
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i submrnerl aTr Affidavir darcd April 30, 2004 in tbis cssc, and I now subnr-rt lbis
Supplerncnred .{fiftdavir I rnaks thesc statcmcnw bsscd uPoD my owu personai
kriowtedgc a$d upon my rcvicw of &e rccords kcpt by Fairbanls in fte rigular coursc of
is'nuslness.
I arn awarc of rhc lerms of thc se$leocol reacbad by Fairbanks in fiis !roa$er. ln nry
pcsiiton as Chief tnfonnarion Officcr, i had subsarrdal invr:lvemeor !n garheling
i;ijbn:raiiun abour r:lasu raembers, and fhe fees snd cbarges FAirba$ks asgessed :o ne
accounts of class mrmbers, in conncction wfh rbe sc$lement.
ir :s $or possible, as a pracrical slatlgr, lo Sgnply wrtte-ofq, rcvelse, refirnd or rernb]rrse
r:,,11. ,i,lss aod ch4rges lhat borrowers claim werc "irnpropcr," €veD, if uhilsr'" cia!-rns welc
rrue, Drcausc of various lirniuions in how Fairbanks (and other industr} parfr.c;panls)
kaeps its records.
Fairbanks usss 4 compuerizcd sy$cro, kaown aS the MOngqge Scryicing Pladcrm
i.-hl.Sp'y qvstetn" in con*ecuon rvirb its loan servieing acfivitics. This syslein sho'*s.
ilibl.oatioc aboilt lhe !oan, sucb ae vbe loau balance, whcn borrower psylrlrnls are pasted
i.,: lbe account, and whar fecs and chnrgcs Sairburlcs assessed to tbe acc$wi'. tiowt"'er,
rirc sysrsn does not allow Fai$arks to distinguisll for asy paniculsr boxrower, mar:! of
..irf, ,::rcr-r,srsrasces pe*atning to Se assesS::nent Of Specific fees and charges
Several exaarples will illusrarc the poinr. Onc pracrrce that bas bccu qricsrioneci :is
whrther fairtranks propcrly assessed late cbargcs in counection wirb bon'*:weis' mcnrhlv
ioan paymenrs. il for exampl€, a bqnower'i paymeru ir due on rb'e firsl day of rhe
riro11lb antl has s gracc pcriod unfil tre end of &p 16& day of tle monrh' $c lv{SP sysiem
ft)ay leveai rbar F'airbanls' effective dare for rhc borower'g payneff is the lSrh da'v of
EXHIBIT I
7.
&c monrb an4 rhar Fairbanks assesscd a latc cbargc. As crplaincd in ParagBpb 7 bclow'
rtre MSP sy$eu has not always eccgratcly idcnrificd rbe darc wher $afubalts 53gfjved
rhe bonower's paymcnrs. lf tbe paymcnt was received at Fairbants os fre t5tb day of
the monrh, the bonover's pa)rncot was tirncly qnd r lar fce should not have bcen
cbuged; if ttre paymenr wati $or received ustil &e l?d'day of the monh, fte paymcor
was lare and thc lare chargc praper. The only way rhat Fairbasks couid lss'ess wbetber
latefeesandcbargeswcrcapproprieewouldbctrrougbapoin*akingloan-levelinquiw.
ln mosr cases, Fairbad$ would havc to obtain docume$arion from tbe borrower showing
nhen a paymEnl was scnr to a$O rcc.civcd by Faiibanks, artq ln ahnost qll insrances' tbc
borrower does not bave such documcntation either' In effecl, it would be acually
irnpossible to sort out nAicb bormwcrs wcre assosscd impropcr lsrc f€es and which
bonowers wcre not.
While tbc MSP systen docs not trBck thc dare on which Fairbanl$ receives s consumer's
paymeut, Faubanla curre*ty is aware offte 4ate of rsceipr tbrougb one of wo neans:
fir51, to tbe cxtcnl s corutum€r makes a monrhly Flymsnr !o fte Fairbanks' lockbox
ad&css (wbich is ltrc addrcss notgdon tbc rnonrhly sDaternetrt), tbat payment would bc
proccss*d imrnedi*ely; an{ sccon4 if Feirbanls rcccivcs tbc paymcnt by ameans otbcr
rtrsn fi,rough rhc locl$ox, ttre metbod ofpaymenr (for cxample' rhe cbeck) is daw'
sramped on tbe dan of rec.eipt an4 *pon proccssing, tbc palmcnr u crcdrred cffcctive tbe
darc of receip' h either case, thc effecrive darc of rhe receipr of paymcnt, rcgardless of
&c date of prroccssing, is "loadcd' tlto tbc MSP.system' Ovcr tbc past eigbt ro rwcive
monibs, Fauba*s bas becn rn tbc process ofproccdurally modifving aad irnproving is
opcrariosal praqiccs and conrols ro a poiat wbcrc it uow hrow$. witb rcasonablc
EXHIBIT I
9.
accqracy, tbc datc of a receipt of a paymmt urhic[ bccausc of thc improvements,
coinci&s witb ttre eft'ecnvc posting darc for thc peymcne However, Frirbnnks vcry
lrkely would n$ be able to dercrnsine rbe cffecrivc po$ing dEtc for a majoriry of class
membcrs since thc class pcriod begau on Jlnuary I, 1999 aud bccause Fairbanks bas beeo
reflecring, wfuh reasouable accuracy, &c darc ofpymcor reccipt into tbc MSP sysam for
all consumpr paymeils only fu approximficly &e past eight to twelve r[ooths, althoug!
possible indiviclual e:rcepdons may still occur.
Similarly, anotber pracricc at issuc io this cEse concens lender-placcd insurauce ("LPf').
$airbanfs oblams LPI whcn borrorrcn arc in dcfaulr, bil ro rnalc rcquircd mont$y
paymens needcd to provide sulffcient ffnds n meintein insurnnce on the propcny
sccnring thc loar; asd do not themselves rnailoraia hsurasce on the prop€rty. Fairbar*s'
MSF sy*cm sbows if a default occutrs and if es in$rtncc ps)rment is dus, bul borrowers
oftcn do not provide Fafubanks evidcnce rhar thcry bave indepcndtnsly obtaincd insurancc
covcring dre propcrry. Oncc agaln, a loan-by-loil in+rity would nccd to bc rnade,
requiring a review of correspondcncc torn or contacrs witb borrowers, to asceruirn
urberbcr Fai$anks propcrly purcbascd LPL or whctbcr e borower bad nlready purcbased
insurance. If Fairbanks Bcvcr rcccivcd notice of an in$rrance ovcdap, but inswancc bad
bccn purchascd by the borrower, Fairbauks' rccords would nol show st sll tbar the
iosuranee Fairbeoks force placcd was unnccessary.
The same scenario ocsrtrs wirb prepaVmenr pcnalties. Many bolTowers bavc provisions
in rbeir nolcs addtsssing the cixcurs$asser u$dsrwhicb Sairbanlcs cgn a$sEss those
pena}ius, bur rhis inforuatisn is rypically nor sbown oa thc MSP sysrsnr" An individual
EXHIBIT I
10.
review of cacb bonower's sotc would frcre&re be neadcd to ascertah wbether FairbanXs
bad complied witb &at bortower's uon rcryriren€ot$.
The same exerci$ would need to be npeated for nany of the fecs, chargcs and pracdccs
ar issuc in rhe serlernsnt in order to rcsearch and agempr to wlidete data. Givcn rbe
l.arge numbcr of fces, cbargcs andpracdces involved, rbe lcagtb of tbc class perhd, and
rh* sizc of &e class, any zuch lom-levelreview would nkc many mooThs, if not longer.
Io many 'nsrallces, if a borrower bad nor rctaiacd appropriate cloctltttcnntion, Fairbanks
mighr not bc able to tell, eveo atEr s ios,tr-lcvel rcview, whetbcr e pardcular charge was
appropriatc
Because of tbesc circumstances, surly of&e fces and cbarges asscssed by Fairbanks
were proper" but the MSP sptcm cilmot rcll you that tbcy wcre. Jusr as a loan-level
revicrv would be ncccssary in msny ingances to reteal improper fsss ald chatgcs, a loan
level rcview would be nccessary to rcveal $ey were FroPcr.
l l .
EXHIBIT I
I declarc udcr penalry of perjury &$ tbc foregomg is mte and corre$. Execwcd tbis
JL Uv of May,2004.
LtBwillo(nn.,
6
EXHIBIT I