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» VISIT US ONLINE @ DSNEWS.COM 71 In a deposition, expert witnesses are scru- tinized on the mailing and tracking of a letter, as well as its delivery or "return to sender." Many times, third-party service providers are also questioned about Postal Service pro- cedures to probe their depth of knowledge. Because of this, it's a good idea to perform vendor audits to evaluate not only their competence, but also their comprehension of postal procedures and best practices. A common strategy is to simultaneously send the notice via first class mail in addition to certified mail, because the first class mail reaches the borrower's mailbox regardless of the borrower's behavior. is is known as "shadow mail," and demonstrates that the lender has made every effort to communicate—the borrower can't say, "I didn't get the letter." Combined with certified mail tracking, shadow mail supports the argument that the lender has employed exceptional due diligence in the notification process, and it also played a helpful role in the "dog in yard" case. BE METICULOUS ere's no way around it: e burden of proof in these cases is immense. A lender may have been careful and diligent only to see their defense derailed by one technicality, one weakness in the armor, so to speak. Notices not delivered in the proper manner are subject to as much judicial scrutiny as notices properly delivered but containing incorrect information. Despite the compliance of the letter itself, if the sender cannot prove that they made every attempt to communicate by mail—supported by the physical evidence of an unclaimed envelope or signed green card—then they might have to start the entire foreclosure process from the beginning. In addition to costly restarts, a poorly executed defense can result in settling for more money than necessary. And it could have more lasting consequences by establishing a precedent that can be used in future cases with similar proof-of-delivery circumstances. e vast majority of these foreclosure cases are settled, which, due to the nature of settlement disclosures, makes it difficult to determine the actual costs resulting from the lawsuits. However, what is known is that it is always better to win the case than to lose or settle. It is important for all lenders to have the confidence that processes and procedures have procured sufficient evidence for the legal team to build a rock-solid defense. IMMEDIATE STEPS TO ENSURE A SOLID DEFENSE First of all, the delivery method must be chosen carefully. It is advisable to always send critical communications by certified mail with return receipt. As with the content of notices, the delivery method is driven by both contract and statute and varies substantially from state to state. In the mortgage industry, the under- lying contract is typically the Government- Sponsored Enterprises' Uniform Security Instrument, the standard Fannie Mae and Freddie Mac contract used in the vast major- ity of mortgages in the country. Provisions within this contract require the lender to provide notice to the borrower of their 30-day right to cure any default. Layered on top of this baseline are ad- ditional requirements mandated by state law. For example, New Jersey requires that borrower communications be sent by certified mail with return receipt, while Massachu- setts requires certified mail (without return receipt) and first class mail. Due to the differ- ences between jurisdictions, we consider it a best-practice to send certified mail, request a return receipt, and follow up with a first class letter—a piece of "shadow mail." When a case hinges on a piece of un- claimed certified mail, it is always preferable to have physical possession of the mail piece during the legal proceeding. A scanned image of the front and back of the notice is the next- best option. In either case, the desired result is the ability to exhibit any idiosyncratic data points that may be present, such as the mail carrier's notes. Beyond that, it is essential that servicers, trustees, and attorneys establish standard operating procedures that articulate the entire process internally, as well as externally, through the USPS. At the end of the day, it is important to make sure there is a rigorously documented printing, mailing, delivery, and return-to- sender process, and that the legal team is fully informed not only of the facts of the case, but also the finer points of how the Postal Service delivers certified mail. Being fully prepared is essential to overcoming a legal challenge. In the event that defending critical communica- tions in court becomes a reality, it is essential to know where the evidence is—and how to use it. P "More than ever, mortgagees, foreclosure attorneys, and trustees must do everything possible to ensure that their data matches the actual information notated on the envelope by the mail carrier. COVER STORY M ARKET PUL SE INDUSTRY INSIGHT INDUSTRY INSIGHT

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