Say it ain't so!
Oh wait... never mind.
IBM has found itself in the crosshairs of the US government after one of its subsidiaries has been accused of financial fraud. A lawsuit [PDF] filed in the US District Court of Southern New York accuses both Big Blue and its Seterus loan servicing company of taking more than $13m from Fannie Mae in reimbursements it was not …
Is it a permissions thing? Almost any one could produce a doctored screen shot to "prove" revocation. Only the authorised admins could actually revoke. Perhaps they were up against a time limit with admins sick/on holiday/under arrest?
Seterus still has my mortgage title in someone elses name, since 2009 to now. I;ve told them about this and i sent them certified letters/notarized letters, and they still turned a blind eye to fixing the problem. They said as long as the mortgage gets paid, that's all that matters!! BULLCRAP. My whole life has been based around Seterus' error to commit fraud, by preventing me to move into a bigger house to care for my mother with cancer and my brother with mental illness. I hope this gets fixed asap!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I hope the mortgage company does a foreclosure on these peoples homes as payback!
IBM Lender Services n/k/a Seterus: Stupidest Strategic Move Since AOL-Time Warner Merger
February 13, 2012
IBM is the second most valuable brand in the world, according to Intebrand’s 2011 Ranking of the Top 100 Brands. Not the second most value technology brand, nor the second most valuable American brand .. the second most valuable of any brand, anywhere.
IBM’s name alone is worth a whopping $69.9 billion dollars. Only Coca-Cola is worth more, and just barely, at $71.9 billion. Microsoft comes in third at $59 billion, Google fourth at $55.3 billion, GE at $42.8 billion .. Apple is a all the way down at eighth, with their iconic apple valued at $33.5 billion.
IBM’s market cap is $223 billion, so their good name alone accounts for 31% of the company’s value. Let’s think about that: almost one out of every three dollars this 100 year-old tech behemoth is worth comes from their good name, their reputation as the bedrock of technology, integrity, and brilliance.
When I think of IBM I think of scientists wearing white lab coats toiling away around the world to build HAL, the self aware computer that even entry-level Geeks recognizes as a one-letter decrement of IBM.
HAL, which IBM is still trying to build, lost his mind, somebody within IBM’s strategic planning group seems to have done the same and decided to ramp up “IBM Lender Services,” a foreclosure fraud-factory.
Somebody in corporate communications must have recognized that putting almost $70 billion at risk to run a document sewage plant seemed like a bad bet, so in 2011 they changed the name to “Seterus.” I don’t know if Seterus is derived from the Indonesian name “Seteru,” meaning enemy, though if so the point’s well taken: IBM Lender Services/Seterus is the worst enemy to IBM’s good name in the company’s history.
For the sake of simplicity, and because they deserve to be mocked for this wildly irresponsible move, I’ll continue to use their own original name — the name stamped on countless fraudulent court records — IBM Lender Services.
It seems like at the end of every bubble there’s an obligatory insane strategic move by a major corporation; moving a business with $107 billion in revenue into fraudulent foreclosure processing is arguably worse than the infamous AOL-Time Warner acquisition. Let’s review that deal. On Jan. 10, 2000 AOL announced it was acquiring Time Warner in a “historic merger.” Time-Warner’s stock was trading at $189.75. Two and a half years later, on Jul. 29, 2002, a share of that same stock was worth $39.90.
Granted, during the dot-com bust many stocks tumbled off a cliff. Except that Time Warner was not a dot-com; they’re a roll-up from a series of media-company acquisitions going back to 1922. They should have weathered the dot-com bust reasonably well; instead their stock slid 83.7%.
Similarly, when I tell people that IBM is in the mortgage servicing business, with a special focus on foreclosures and foreclosure document processing, they’re usually dumb-struck. Time Warner wasn’t a dot-com .. except that they were. Similarly, IBM isn’t a sleazy mortgage servicer .. except that, for whatever reason, they decided to become one.
IBM stock, which I don’t hold any position in, mainly because I’ve been meaning to write about this for a long time, deserves the same fate as Time-Warner.
If IBM think’s that’s unfair they should think about how people who were evicted from their homes felt when IBM’s fraudulent documents were used to justify the evictions.
Would those evictions have happened anyway if IBM, and the mortgage servicers who employed them, acted carefully and responsibly? As they say in court “objection .. irrelevant,” because they didn’t; they used every slimy shortcut in the book, and a few others that same book frowns upon.
Just to be clear, besides (poorly) managing the back-office functions for other banks IBM also buys servicing right and services mortgages; they’ve become what people think of as “the bank,” .. a mortgage lender, or at least the public face of one. They’ve been at this since the mid 2000’s but they’re not slowing down: less than two years ago IBM announced the acquisition of Wilshire Credit Corporation from Bank of America, an acquisition BOA inadvertently swallowed with Merrill Lynch.
Just as a reminder, “servicers” are who borrowers think of as “the bank,” the entity they engage with. Servicers collect money they send to investors, or prosecute foreclosures on behalf of investors. However, it is uncommon for services to put much, if any, of their own money into a mortgage loan.
I don’t know how government agencies — including court houses and public records repositories — could remain comfortable with the company that produced this mess. Even Fidelity had the common sense to spin-off Lender Processing Services (LPS), even as IBM was apparently doing exactly the opposite.
In an inquiry by the New Jersey Supreme Court titled “In the Matter of Residential Mortgage Foreclosure Pleadings and Document Irregularities,” Joseph M. Perry, IBM Lender Business Process Services Vice President of default management, defends the company. It’s telling that the first sentence highlights the name change.
I spent years focused on corporate strategy. I know from personal experience that sometimes corporate strategy sessions, especially when forming new product lines, can run wildly off the rails.
As a group proceeds through an exercise it’s not uncommon, after days of research, to unveil an entirely illogical or even illegal “great idea.” Every time I’ve seen this happen most participants quickly realize their exercise has taken a wrong turn; sometimes they’re annoyed, usually they laugh, but they never move forward.
IBM Lender Services is clearly an idea that should have been put to bed when it was born in some boardroom full of bored strategists. Based on IBM’s recent behavior it seems clear they’ve now realized this, but it’s not so clear what they plan to do about it (hint: recognize the loss and shut it down .. quickly).
IBM Lender Services is like a cancer to an otherwise great company. But cancer’s grow. It’s only a matter of time until Interbrand and other clients react to the reputational damage this tiny group has done, and the damage to brand value alone will more than offset even the wildest upside potential of this deal.
Biting the hand that feeds IT © 1998–2019