HousingDoom has asked this question before, and we’re going to keep on asking it- WHAT HAPPENS TO THE DATA ON THE COMPUTERS OF DEFUNCT LENDERS?
Yesterday the following notice appeared in the Arizona Republic. The property of the now defunct Eagle First Mortgage is being auctioned off:[no link available, hat tip L!]
NOTICE OF PUBLIC AUCTION: Wednesday, June 13, 2007 @ 10:00am at: 5060 N. 19th Avenue, Suite 101, Phoenix, Arizona. Preview at 9:00am. The following property (miscellaneous office furniture & equipment) belonging to Eagle First Mortgage will be sold at public auction to satisfy liens per A.R.S. 33-361 (D) to pay for delinquent rents, taxes and late fees. Cash or Certified Funds Only. Pub: May 27, June 3, 10, 2007
Doom was previously informed that in the case of the auction of Golden Gate Mortgage’s office equipment, the computer disks were NOT wiped prior to being auctioned off. Yesterday’s notice does not indicate who is holding the auction for Eagle First, so we are unable to determine if there are any computers in this sale, or if they will be wiped. It appears likely though, that there is the potential of personal financial information falling into the wrong hands.
Given the highly sensitive information on the computers of mortgage lenders, does it really make sense to auction them off with the data still intact? Implode-o-meter now lists 76 lenders that are no longer doing business, which represent heaven only knows how many branch offices with all their respective computers. That could represent a lot of opportunites for the misuse of data.
I for one have no idea how much personal information is kept on these computers, or for how long after a loan is made that the information is kept. It seems though that these are the kinds of questions that consumers should be asking BEFORE data is misappropriated, rather than after.
This is such an important story that is being missed for the most part by the MSM. Think about all of the little brokers that set up shop that now have to store files for the next 3-5 years. Where are those files going? I guarantee there are plenty in garages all across the country.
I wrote some more about it here on my blog.
morganb -
I’ve got your May 18th post on the sidebar and you’ll find a comment there. Obviously, we need to talk.
A used hard drive adds about $5-$10 to the value of a computer. It’s easier to just remove them and have them professionally destroyed.
Maybe the right question would be “who is liable for the information on the drives?”. The fear of a massive class-action lawsuit would fix this, but does anybody know who is responsible?
Sandman-
That’s a great question- not only for the drives, but the files that are left as well. I was told in the case of Golden Gate Mortgage- the files were left on the desks when the auction house came in.
It’s my understanding that if the rent isn’t paid and the tenant is locked out, the contents are forfeited and the landlord may dispose of the contents to pay the bills- so does that leave the mortgage company off the hook? Besides, if the case where the company is defunct, there’s not much you can do to them at that point.
So does that make the landlord and/or auction house responsible for this data? I’d love to have someone tell us.
If the landlord can liquidate the trade fixtures & equipment to recover losses…
and the landlord has no direct agreement of fiduciary responsibility or confidentiality to the people those folders, drives and files represent…
could they gather the info, market it for what it is, and sell it on the “open market” to whoever the highest bidder is?
It’s always messiest right after the big party ends, isn’t it?!?
After googling for articles on negligent enablement of identity fraud, it doesn’t look very good (for the consumer). Most of the cases I see weren’t decided in favor of the victim. But I’m far from a lawyer, so take that with a giant grain of salt.
This is pretty interesting, I’d also like to know the answer. Something tells me that we’ll all be experts on the details of these cases over the next few years, though…
Asset Hunter, Sandman-
I’m no attorney either, but what is probably a frightening precedent for this is the case of Paris Hilton, who had the contents of her storage unit confiscated when someone neglected to pay the bill:
I doubt the personal records of the rest of us are any safer.