DJSP Enterprises, Inc. Announces Recent Developments
PLANTATION, Fla., Oct. 19, 2010 (GLOBE NEWSWIRE) — DJSP Enterprises, Inc. (Nasdaq:DJSP) (Nasdaq:DJSPW) (Nasdaq:DJSPU) today announced that Stephen J. Bernstein, the Company’s Lead Independent Director, has been appointed as Interim Chairman of the Board of the Company. Initially, Mr. Bernstein’s role as non-executive Chairman will be a full time position as he provides Board support to the Company as it develops and executes plans to respond to recent developments impacting the Company and the industry. Mr. Bernstein replaces Mr. David J. Stern as Chairman of the Board. Mr. Stern continues in his role as Chief Executive Officer of the Company and will serve as its President.
The Company also announced the voluntary resignations of Richard Powers, as President and Chief Operating Officer, Kumar Gursahaney as Executive Vice President and Chief Financial Officer and Howard S. Burnston, as Vice President, General Counsel and Secretary, each of whom joined the Company in 2010.
About DJSP Enterprises, Inc.
DJSP is the largest provider of processing services for the mortgage and real estate industries in Florida and one of the largest in the United States. We provide a wide range of processing services in connection with mortgages, mortgage defaults, title searches and abstracts, REO (bank-owned) properties, loan modifications, title insurance, loss mitigation, bankruptcy, related litigation and other services. Our principal customer is The Law Offices of David J. Stern, P.A. (“DJSPA”). We are headquartered in Plantation, Florida, with additional operations in Louisville, Kentucky and San Juan, Puerto Rico. Our U.S. operations are supported by a scalable, low-cost back office operation in Manila, the Philippines that provides data entry and document preparation support for our U.S. operations.
Forward Looking Statements
This press release contains forward-looking statements about us within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), including but not limited to management’s expectations about the impact of our expense reduction efforts and recent developments in the residential mortgage foreclosure industry. Additionally, words such as “anticipate,” “believe,” “estimate,” “expect” and “intend” and other similar expressions are forward-looking statements within the meaning of the Act. Such forward-looking statements are based upon the current beliefs and expectations of our management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions, changing interpretations of generally accepted accounting principles; outcomes of government or other regulatory reviews, particularly those relating to the regulation of the practice of law; the impact of inquiries, investigations, litigation or other legal proceedings involving us or our affiliates, which, because of the nature of our business, have happened in the past to us and DJSPA; the impact and cost of continued compliance with government or state bar regulations or requirements; legislation or other changes in the regulatory environment, particularly those impacting the mortgage default industry; unexpected changes adversely affecting the businesses in which we are engaged; fluctuations in customer demand; our ability to manage growth and integrate acquisitions; intensity of competition from other providers in the industry; general economic conditions, including improvements in the economic environment that slows or reverses the growth in the number of mortgage defaults, particularly in the State of Florida; the ability to efficiently expand our operations to other states or to provide services we do not currently provide; the impact and cost of complying with applicable U.S. Securities and Exchange Commission (“SEC”) rules and regulations; geopolitical events and changes, as well as other relevant risks detailed in our filings with the SEC, including our Annual report on Form 20-F for the period ended December 31, 2009, which are available at the SEC’s internet site (http://www.sec.gov). Forward-looking statements in this press release speak only as of the date of the press release, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ.
CONTACT: DJSP Enterprises, Inc. Chris Simmons, Director of Investor Relations 954-233-8000 ext. 1744 Cell: 954-294-9095 900 South Pine Island Rd. Plantation, FL 33324
The foreclosure crisis has an unusual capital markets twist. A law firm at the center of the controversy in Florida, the Law Offices of David J. Stern, sold its foreclosure-servicing business to a special purpose acquisition company, or SPAC, the Chardan 2008 China Acquisition Corporation, less than a year ago. The newly formed company is called DJSP Enterprises.
When I last wrote about SPACs, it was to note their looming death. SPACs are specially formed public companies set up to acquire a single public company and take it private. I have previously criticized these entities on the following grounds:
A purchase of SPAC securities is typically an investment in a single, to-be-determined acquisition. At the time of his or her purchase, a public investor is uncertain what business or industry the SPAC will enter, the size of the SPAC’s acquisition and the leverage it will bear and whether the SPAC’s management will have any facility in the industry of the investment. Their influence on these matters is instead limited to a vote on the acquisition.
However, this vote is one that has an inherently coercive aspect to it; a nay vote entitles investors only to their share of the remaining offering proceeds, an amount that is less than their original investment. By this time, you are unlikely to want to take the loss instead preferring to take a flyer on the acquisition. A SPAC investor is also left relying upon the SPAC sponsors to select an appropriate target.
These problems appear to have borne fruit. According to SPAC Analytics, SPACs have significantly underperformed the market. Their index of special purpose acquisition companies shows that since their reappearance back in 2003, SPACs are down 17.8 percent, compared with a fall of 4.5 percent in the Russell 2000. During this time, there have also been some terrible blow-ups. This includes American Apparel which, after a long struggle, was itself acquired by a SPAC, the Endeavor Acquisition Corporation, in 2007. American Apparel has struggled with liquidity problems of late and averted breaching its debt covenants at the last minute when its primary lender, Lion Capital, agreed to modify American Apparel’s loan.
The DJSP Enterprises SPAC was always a particularly risky deal. The initial SPAC was formed under the laws of the British Virgin Islands. This presumably was to take advantage of tax laws and the laxer disclosure laws applicable to foreign issuers, particularly those that are not listed elsewhere.
Florida Judge Eileen O’Connor denied Law Office of David J. Stern motion to quash a subpoena from Florida Attorney General Bill McCollum in connection with the AG’s investigation into several of the state’s foreclosure firms.
Robert S. Mueller III
Director Federal Bureau of Investigation
935 Pennsylvania Ave, NW
Washington, DC 20535
Central District of Florida
400 North Tampa Street, Suite 3200
Tampa, FL 33602
Dear US Attorney Robert O’Neill and Director Mueller,
When it comes to foreclosures, there is mounting evidence of a state of rampant lawlessness in Central Florida. There are increasing signs that big banks routinely evade laws meant to protect homeowners, in many well-documented cases of ‘foreclosure fraud’. Despite the demonstrated existence, for instance, of ‘robosigners’ signing affidavits attesting to documents that they have never seen, the parties engaging in such misconduct are not being brought to justice. Big banks are mischaracterizing this as mere “technical problems,” and apologizing only where there is clear and very public evidence of harm.
It is not enough for big banks only to apologize for fraud, perjury, and even breaking and entering – when they are caught. It is time for handcuffs. Fraud does not become legal just because a big bank does it.
On September 20, 2010, after my office found evidence of systemic foreclosure fraud perpetrated by big banks and foreclosure mills, I called for a halt to illegal foreclosures.
Since then, big banks such as Bank of America, JP Morgan Chase, GMAC, PNC and others have suspended foreclosures or foreclosure sales. These banks are still claiming that the massive fraud they have perpetrated amounts to nothing more than a series of technical mistakes. This is absurd. This is deliberate, systemic fraud, and it is a crime.
To give but two of the many available examples, attached is a deposition from an ex-employee of one of the largest ‘foreclosure mills’ in the state, the Law Offices of David Stern. In it, this employee testifies under oath that it was routine for that office to falsify documents regarding military records, in order to move foreclosure cases along more quickly.
The local media has reported on the case of Nancy Jacobini; a contractor for JP Morgan Chase broke into her home after the bank mistakenly foreclosed on it. JP Morgan Chase ‘apologized’ for terrifying her. But we do not have an apology-based legal system; we have a system of laws. I am writing to ask you to enforce them.
The organized and systematic manufacturing of falsified documents to deprive people of their homes is not only a threat to the integrity of the legal system. It also aggravates and extends the weakness in the housing market. Who is going to feel comfortable buying a home if a big bank can simply take it, whether or not that bank has a right to it? Given the securitization of mortgage-backed securities, this misconduct is a threat to our securities markets as well. But fundamentally, this is a question of protecting basic property rights – if you don’t own it, then you shouldn’t try to take it. Without clear property rights, and a legal system that insists on clear proof of those rights before transferring ownership by force, the economy will fall apart.
If perpetrators of perjured affidavits and other systematic criminal activity can get off simply with civil liability — or even less, an insincere bureaucratic apology — the freedom that Americans enjoy will erode quickly in the face of lawless seizures of property. I appreciate your work on the joint Middle District of Florida’s Mortgage Fraud Initiative, and respectfully request that the efforts of your offices turn towards reining in this rampant criminality.
The battle between Attorney General Bill McCollum and four law firms accused of shoddy foreclosure practices continued in Broward County Court on Tuesday, with the Law Offices of David J. Stern challenging the state’s subpoena.
Jeffrey Tew, legal counsel for Stern’s Plantation-based firm, argued that the attorney general’s office does not have jurisdiction to investigate law firms under the Federal Deceptive and Unfair Trade Practices Act, or FDUTPA.
That statute — the basis of McCollum’s case — only applies in cases where goods and services are being transferred between the accused and the alleged victim, Tew said.
“The alleged quote-unquote `victims’ in this case are the borrowers,” said Tew, presenting a motion to “quash” the subpoena. “FDUTPA requires that the law firm be exchanging goods and services of monetary value with the borrowers.”
Tew said that the law firm was exchanging its services with the banks, not the borrowers.
The judge, Eileen O’Connor, said she would rule in a couple of days.
The case is crucial to the state’s investigation, because it comes on the heels of another ruling in which a Palm Beach judge quashed the state’s subpoena of the Shapiro & Fishman law firm. That judge said the Florida Bar and the Supreme Court have jurisdiction to sanction lawyers, not the attorney general.
O’Connor indicated that she would judge independently.
“That’s not your better argument,” she told Tew after he referenced the Palm Beach case.
Lawyers Peter Ticktin, left, and Josh Bleil, of The Ticktin Law Group, are shown with depositions from 150 robosigners, alleging that the court documents reveal an industry-wide banking scheme to defraud homeowners, in Deerfield Beach, Fla. Tuesday, Oct. 12, 2010. (AP Photo/Lynne Sladky)
Robo-signers: Mortgage experience not necessary
Banks hired hair stylists, teens to process foreclosure documents, workers’ testimony shows
Michelle Conlin, AP Real Estate Writer, On Tuesday October 12, 2010, 9:21 pm EDT
NEW YORK (AP) — In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.
“The mortgage servicers hired people who would never question authority,” said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them — earning them the name “robo-signers.”
The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.
Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.
“This was an industrywide scheme designed to defraud homeowners,” Ticktin said.
The depositions paint a surreal picture of foreclosure experts who didn’t understand even the most elementary aspects of the mortgage or foreclosure process — even though they were entrusted as the records custodians of homeowners’ loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn’t define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff’s assignor or defendant. She testified that she didn’t know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. “I don’t know the ins and outs of the loan, I just sign documents,” she said at one point.
Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.
Jeffrey Tew, Stern’s attorney, confirmed that there were layoffs, and that it was because several key lenders had frozen prosecution of foreclosure cases. Tew, a partner at Tew Cardenas LLP in Miami, said it was only normal that some cutbacks had to occur as work slowed. He said most of the layoffs were temporary positions.
By Dakin Campbell and Donal Griffin – Oct 12, 2010 12:00 AM ET
Citigroup Inc. said it stopped steering foreclosure work to a Florida law firm whose court filings to support home seizures are under investigation by the state’s attorney general.
The bank, which is proceeding with seizures as some rivals stop to recheck documents, had used the Law Offices of David J. Stern PA. Florida Attorney General Bill McCollum said Aug. 10 it is examining whether Stern and two other firms filed “improper documentation” with the state’s courts to speed proceedings.
“Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the New York-based bank said in an e-mailed statement. Citigroup services loans for government-sponsored entities, such as Fannie Mae and Freddie Mac. Stern “was approved by the GSEs during the time in which it was retained by Citi,” the bank said.
Lawmakers, attorneys general and consumer groups have pressed mortgage firms to follow Bank of America Corp., the biggest U.S. lender, which last week suspended all foreclosures to check whether faulty documents were used to confiscate homes. JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit froze seizures or evictions in Florida and 22 other states. Citigroup said last week it doesn’t plan to join them.
McCollum’s office “hasn’t made any charges or allegations of fault,” said Jeffrey Tew, an outside attorney for Plantation, Florida-based Stern, who declined to discuss its work for Citigroup. “I believe they’re a client. I can’t go into any details.”
Attorney General McCollum I applaud you for STANDING UP for Florida!
Assistant AG’s June M. Clarkson and Theresa B. Edwards what an amazing job! Thank you.
Investigate the law suit Shapiro and Stern had against each other…You might just find missing pieces there.
The facts are the facts…crystal clear. This glass is not half full but spilling out the rim of the glass!
Attorney General Bill McCollum today filed a Motion for Rehearing on last week’s ruling by Circuit Judge Jack Cox that the Attorney General could not investigate the Shapiro & Fishman law firm for the firm’s alleged involvement in presenting fabricated documents to the courts in foreclosure actions to obtain final judgments against homeowners. The Attorney General is currently investigating four law firms, The Law Offices of Marshall C. Watson, P.A.; Shapiro & Fishman, LLP, the Law Offices of David J. Stern, P.A., and Florida Default Law Group, PL for allegedly engaging in these practices.
By Phil Milford and Denise Pellegrini – Oct 9, 2010 12:01 AM ET
A former paralegal told Florida investigators that workers at a law firm that processed foreclosures signed paperwork without reading it, misdated records and skirted rules protecting homeowners in the military.
Tammie Lou Kapusta, who said she spent more than a year at the Law Offices of David J. Stern PA, made the accusations in a Sept. 22 interview with lawyers for Florida Attorney General Bill McCollum. In August, McCollum announced a probe of three law firms to see whether improper documents were created and filed with state courts to hasten the foreclosure process.
Jeffery Tew, a lawyer for the Stern firm, denied Kapusta’s claims.
Kapusta, who spoke under oath, said the Stern firm ballooned from 225 employees when she started in March 2008, to more than 1,100 when she was fired in July 2009. She described a disorganized workplace where documents got lost and mortgages were misfiled. The training process was “stupid and ridiculous,” she said.
“There were a lot of young kids working up there who really didn’t pay attention to what they were doing,” she said, according to a transcript. “We had a lot of people that were hired in the firm that were just hired as warm bodies.”
Kapusta’s statements were reported Oct. 7 in the Tampa Tribune. Tew, of Tew Cardenas LLP in Miami, said he wasn’t aware of the interview until it was released to the public.
“We didn’t get a chance to cross-examine her,” he said. “It was a one-sided statement by a disgruntled employee. There was a lot of animus and personal references, and she seeks to besmirch people’s reputation. The law firm denies there’s any accuracy in the charges.”
There’s a court hearing set for Oct. 12 to determine whether McCollum’s office has jurisdiction over the firm’s conduct, Tew said.
“This is a civil investigation, and the attorney general hasn’t made any conclusions,” Tew said.
Bank of America
Florida Default Law Group
Law Offices of David Stern
Lender Processing Services
Litton Loan Servicing, LP
Security Connections, Inc.
Action Date: October 10, 2010
Location: Charlotte, NC
On October 8, 2010, Bank of America announced it was extending its suspension of foreclosures to all 50 states. A review of the documents used by Bank of America to foreclose readily shows why this was the only appropriate action for Bank of America. In thousands of cases, Bank of America has used Mortgage Assignments specially prepared just for foreclosure litigation. On these assignments, the identity of the mortgage company officer assigning the mortgage to BOA is wrongly stated. Who has signed most frequently as mortgage officers on mortgage assignments used by BOA to foreclose? Regular signers include the “robo-signers” from Lender Processing Services in both Alpharetta, Georgia and Mendota Heights, Minnesota. LPS employees Liquenda Allotey, Greg Allen, John Cody and others, using dozens of different corporate titles, sign mortgage assignments stating BOA has acquired certain mortgages. When the mortgages involved originated from First Franklin Bank, BOA used Security Connections, Inc. in Idaho Falls, Idaho. Employees Melissa Hively, Vicki Sorg and Krystal Hall also signed for many different corporations for BOA. Litton Loan Servicing in Houston, Texas, a company owned by Goldman Sachs, also produced documents as needed by BOA, usually signed by Denise Bailey, Diane Dixon or Marti Noriega signing as officers of at least a dozen different mortgage companies and banks. BOA also has used mortgage assignments signed by Cheryl Samons, the office administrator for the Law Offices of David Stern, who has admitted to signing thousands of mortgage documents each month with no actual knowledge of the contents. On other cases, employees of the law firm Florida Default Law Group have signed for BOA, using various titles, including claiming to be Vice Presidents of Wells Fargo Bank, all while failing to disclose they actually worked for Florida Default. in most of these cases, BOA is acting as Trustee for residential mortgage-backed securitized trusts. These trusts are claiming to have acquired the mortgages in 2009 and 2010, even though the trusts deadline for acquiring mortgages was often in 2006 and 2007. In hundreds of cases, the mortgage assignments presented by BOA are actually signed months AFTER the foreclosure actions were commenced. At least 50 trusts using BOA as Trustee are involved in using these fraudulent documents. Each trust has between $1.5 billion and $2 billion of mortgages. The BOA documents have been used in thousands of cases, pending and completed, for at least three years. This massive problem cannot be “fixed” in 90 days, but a nationwide suspension of foreclosures is a good, responsible beginning.
TAMPA – First, the Florida Attorney General’s Office launched an investigation into four of the state’s largest foreclosure firms, alleging made-up paperwork and forged signatures.
Then, some of the nation’s largest lenders halted home foreclosures after discovering employees had signed hundreds of thousands of documents without reading them.
Now, in a foreclosure industry bloated by the lingering effects of the housing crisis, a former employee in one of the firms under investigation describes in detail a secret system designed for speed at any cost.
Attorneys and staff members forged signatures and changed dates, casually passed around notary stamps, and notarized stacks of blank documents to be filled in later, said the employee, Tammie Lou Kapusta, in an interview with attorney general’s staff.
At the Law Offices of David J. Stern in Broward County, where Kapusta worked, long “signing tables” were set up across eight floors and employees would process 250 documents per floor each day, she said during the interview.
HEY JUDGE COX, THIS IS WHAT YOUR MOTION TO QUASH IS PROTECTING!
WHERE ARE THE F***ING FEDERAL AGENTS!!!
“I personally did not do it because I refused to do it.”
“I wasn’t going to falsify a military document.”
“I was told that that’s fine, somebody else on your team will do it.”
This just in and it is unbelievable!
We are neck deep in issues today so I do not have time to go through and highlight everything, and there is a lot, but here are some snips…
TAKE THE TIME TO READ THIS IN ITS ENTIRETY
THIS SHOULD BE THE BOMBSHELL THAT STOPS IT ALL IN FLORIDA
MORE TO FOLLOW ON THIS
1 STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL
2 DEPARTMENT OF LEGAL AFFAIRS
3 AG # L10-3-1145
5 IN RE:
6 INVESTIGATION OF LAW OFFICES
OF DAVID J. STERN, P.A.
12 DEPOSITION OF TAMMIE LOU KAPUSTA
16 12:11 p.m. – 1:58 p.m.
September 22, 2010
17 Office of the Attorney General
110 Southeast 6th Street, 10th Floor
18 Fort Lauderdale, Florida 33301
1 P R O C E E D I N G S
2 – – –
3 Deposition taken before Kalandra Smith, Court
4 Reporter and Notary Public in and for the State of
5 Florida at Large, in the above cause.
6 – – –
7 THERE UPON:
8 TAMMIE LOU KAPUSTA
9 having been first duly sworn or affirmed, was examined
10 and testified as follows:
1 Q Let’s go to the assignments of mortgage. They
2 were prepared in-house?
3 A Yeah.
4 Q You’re smiling. You want to tell me about
6 A Assignments were done sometimes after the
7 final judgement was entered.
8 Q Do you know why that is?
9 A Because that’s what we were directed to do
19 Q Can you tell me the execution of the
20 assignments, how it worked?
21 A Assignments were prepared again from the
22 casesum. All of our stuff comes from the casesum. They
23 would be stamped and signed by a notary or not. Per
24 floor we had a designated spot to place them and Cheryl
25 would come once a day and sign them.
1 Q Sign them as what?
2 A As –
3 Q For the bank?
4 A Correct.
5 Q Or for MERS or whoever it was for?
6 A Correct.
7 Q Would these notaries be there watching her as
8 she signed?
9 A No.
10 Q She would just sit there and sign stacks of
12 A Correct. As far as notaries go in the firm I
13 don’t think any notary actually used their own notary
14 stamp. The team used them.
15 Q There were just stamps around?
16 A Yes.
17 Q And you actually saw that?
18 A I was part of that.
19 Q You did it? Are you a notary?
20 A No, I’m not.
21 Q Did you sign as a witness?
22 A I did not. I signed as a witness on one
23 document and after that I decided that I didn’t want to
24 put my name as a witness anymore.
25 Q Tell me about the stamps. You stamped them?
1 A Yeah, I had stamps. Each team had a notary on
2 them or notaries that I was aware of. Whether they were
3 or weren’t wasn’t –
4 Q You had stamps?
5 A Correct. We would stamp them and they would
6 get signed.
7 Q Stamp them in blanks?
8 A Yes.
9 Q Who would sign them?
10 A Other people on the team that could sign the
11 signature of the person or just a check on there or
13 Q Was that common practice?
14 A Yes.
15 Q Was that standard practice?
16 A Pretty much.
17 Q What about the witnesses?
18 A Those would be signed by juniors who were –
19 Q Standing there?
20 A Here, sign this. It has to go to Cheryl, sign
21 it. Then it would go and sit at the desk where Cheryl
22 would sign everything.
23 Q Out of view of the notary and out of view of
24 the witnesses?
25 A Correct.
1 Q Do you know who implemented this procedure?
2 A Cheryl.
3 Q Cheryl did?
4 A Um-hum.
5 Q Did anybody else sign with the firm for the
7 A Yes.
8 Q Who was that?
9 A There were people that were responsible for
10 signing Cheryl’s name. Cheryl, Tammie Sweat, and Beth
11 Cerni. Those were the only three people that could sign
12 Cheryl’s name. If you ever look at assignments you’ll
13 see that they are not all the same.
14 MS. EDWARDS: What are the names again?
15 Cheryl, Tammie?
16 THE WITNESS: Tammie Sweat and Beth Cerni.
17 MS. EDWARDS: Could you spell that.
18 MS. CLARKSON: C-E-R-N-I.
19 BY MS. CLARKSON:
20 Q Did they practice Cheryl’s signature?
21 A I would assume so.
22 Q Did you ever see them?
23 A Not practicing but I’ve seen them sign it.
24 Q Did you see somebody sign Cheryl’s name?
25 A Yes.
1 Q That wasn’t Cheryl?
2 A Yes. All the time.
3 Q Did Cheryl know about this?
4 A Yes.
5 Q Was it at her direction?
6 A Yes.
16 Q Did anyone quit as far as you know due to the
18 A I’m sure but they wouldn’t come right out and
19 say I quit because of the practices. I know that people
20 had left because they were uncomfortable with the things
21 that they were being asked to do, as most of us were.
22 When it got really sticky there were a lot of us that
23 weren’t here.
24 Q What does really sticky mean?
25 A They wanted us to start changing the documents
1 and stuff and doing stuff that we weren’t supposed to be
2 doing as far as service.
3 Q What documents did they want you to change?
4 A Manpower documents. A lot of judges started
5 requiring, because of the Jane and John Doe issues,
6 required that you have a military search for all the
7 defendants. If you named a Jane and John Doe as an NKA
8 you had to pull a military search on them. Unless you
9 have somebody’s social security number technically you
10 can’t pull a military search supposedly.
11 The program that we used for the program that
12 we used, you could put in the main defendant’s social
13 security and John or Jane Doe’s name and it would give
14 us a military search saying that they were in the
16 Q You would get their social security number
17 because the bank documents contained it?
18 A Correct. The lenders, the referrals had the
20 Q Did you put the social in on everybody to find
21 out their address for service?
22 A Not everybody. I personally did not do it
23 because I refused to do it. I wasn’t going to falsify a
24 military document. I was told that that’s fine,
25 somebody else on your team will do it.
1 Q What do you mean falsify a military document?
2 A Well, I’m using the main defendant’s social
3 security number on somebody else’s name, not his name.
4 John Doe and the main defendant was James, I was taking
5 James’ social security number and putting John Doe’s
6 name in there. I wasn’t but that’s what the practice
7 was. The judges started saying we’re not going to
8 consider service completed until –
9 Q There’s a miliary search?
10 A Correct.
11 Q So why wouldn’t they use the right social
12 security number for the right person?
13 A Because you don’t have a social for an NKA or
14 unknown tenant. They wouldn’t enter a final judgement
15 unless the military doc was there.
16 Q So you just used anybody’s?
17 A Correct.
9 A So what we had to do from that point, again
10 the affidavits were still split in two pages, at that
11 point we were supposed to be sending them back to the
12 banks to be signed now. The problem being that a lot of
13 times we wouldn’t get them back or executed in time for
14 the hearings. So we had what they called signature
15 pages that Tammie Sweat or someone else would have in
16 their possession. If we couldn’t get it back from the
17 bank executed in time we would just take a signature
18 page and put it on the affidavit.
19 Q What was on the signature page?
20 A The signature and notary from the bank.
21 Q Were these documents photocopied or were they
22 original documents?
23 A Some were photocopied.
24 Q How would you get that many from a bank
25 original? The bank supplied them to you.
1 A Well, what would happen would be like if I had
2 file A and that one didn’t go to hearing because there
3 was something wrong with it and file B was going to
4 hearing but it was the same bank, I would take the
5 signature page from A and give it to B.
6 Q Oh give it to another file?
7 A And just re-execute this file.
8 Q Okay. That was common practice?
9 A Yes, after Cheryl couldn’t sign.
10 Q Did Cheryl know?
11 A Yes.
12 Q Cheryl knew about all the practices because
13 she is the one who ran the office?
14 A She was the one who implemented them.
15 Q Were there any other activities or practices
16 over at David Stern’s firm that made you feel
17 uncomfortable or that you were unwilling to do?
18 A I don’t know how to answer that question.
19 It’s a loaded one.
20 Q Take your time.
21 A Yeah. Some of the things that were done there
22 just were not on the up and up.
23 Q Explain to me in as much detail as you can
24 what those things were.
25 A I don’t even know where to start with it.
“They have no personal knowledge of the issue and they are supposed to. That is what these judges rely on when they issue judgments against homeowners,” said Matt Englett, KEL Law Firm.
(I-Newswire) October 2, 2010 – CENTRAL FLORIDA — Thousands of Floridians may soon be rescued from foreclosure. Last week KEL Attorneys filed a motion with the Supreme Court asking Chief Justice Canady for a stay on foreclosure cases being handled by law firms currently under investigation for document fraud.
The State Attorney General launched a formal investigation against Shapiro & Fishman, Marshall Watson and David Stern last month. Lenders hired the three big law firms, which handle 80 percent of all foreclosures in Florida, now accused of fraudulently signing documents to speed up the foreclosure process.
“They have no personal knowledge of the issue and they are supposed to. That is what these judges rely on when they issue judgments against homeowners,” said Matt Englett, KEL Law Firm.
Attorney Matt Englett has testimony from one of the people hired to just sign documentation. He describes a conference room with thousands of documents. He testified he would sign one affidavit after another, taking no more than a minute on each one.
“Time is money. The longer it takes to get the property back and sell the property, the more money they lose on that loan,” Englett said.
Englett hopes the motion will stop wrongful foreclosure it its tracks. He estimates that tens of thousands of homes may have already been wrongfully foreclosed upon, and about 80-percent of pending foreclosure actions contains fraudulent documents.
If Englett is successful, homeowners who have already lost their homes could collect thousands from their lender. And for the hundreds of others in Central Florida in the middle of foreclosure, it would buy time to save their home.
About KEL Attorneys:
Our law firm has had the honor to represent clients all over the country. We are also licensed in federal courts throughout the country and we are able to represent your case in state or federal court. In either venue, rest assured that our law firm will pursue your case aggressively and in the most cost effective manner possible.
We are not just your ordinary law firm, we operate as a full-service law firm that provides legal services nationwide and have a strong presence, with a law firm in Orlando and a law firm in Tampa. Due to size, legal expertise and handling client matters for over ten years, we can handle any legal issue or situation you may have.
Company Contact Information KEL Attorneys
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Phone : 4075131900
OneWest Bank employee: ‘Not more than 30 seconds’ to sign each foreclosure document
The recent announcements by J.P. Morgan Chase and Ally Financial that they were freezing some foreclosures because of paperwork irregularities raises a key question: How many more mortgage companies employed “robo-signers?”
In a sworn deposition in July, Erica Johnson-Seck, an Austin, Tex.,-based vice president for bankruptcy and foreclosure for OneWest Bank, said she and her team of seven others sign 6,000 documents a week or about 24,000 a month without reading all of them.
Johnson-Seck estimated that she spent no more than 30 seconds to sign each document.
She explained that while she does not check everything, she does check some information, “which is why I said 30 seconds instead of two seconds.”
Chase Home Finance, LLC
Lender Processing Services
Long Beach Mortgage
Washington Mutual Bank
Action Date: September 30, 2010
Location: New York, NY
On September 29, 2010, financial giant JP Morgan Chase announced it was suspending 56,000 foreclosures because its documents may have been “submitted without proper review.” To assist JPMorgan Chase, Fraud Digest suggests that it dismiss those actions where the Affidavits or Mortgage Assignments were signed by the following robo-signers: Beth Cottrell, Whitney Cook, Christina Trowbridge and Stacy Spohn from the Chase Home Finance office in Franklin County, OH; Margaret Dalton and Barbara Hindman from the Jacksonville, FL office of JPMorgan Chase; and any of the Lender Processing Services robo-signers from the Dakota County, MN office including Christina Allen, Liquenda Allotey, Christine Anderson, Alfonzo Greene, Laura Hescott, Bethany Hood, Cecelia Knox, Topako Love, Jodi Sobotta, Eric Tate, Amy Weis and Rick Wilken. In particular, JP Morgan Chase should look at those cases where the bank has supposedly assigned mortgages to WaMu, WMALT, Long Beach Mortgage Company and NovaStar trusts years after the closing dates of these trusts. The number of questionable or fraudulent documents is likely to be much closer to 560,000 than to 56,000, and that will only be a good beginning.
It was a very sad day for Floridians yesterday when the Florida Supreme Court issued a statement that it does not have authority to intercede while a fraud investigation is pending. Although we may not agree with the decision, we must respect procedures that must be followed.
Florida, do not quit what you are doing because there are many states that we must continue to focus on. Judges need to put themselves in the homeowners situation and understand we cannot make these fraudulent documents up. These documents are sworn statements, under perjury of law and notarized. As officers of the court they must be held accountable. No ifs, ands, buts or suppose here. These are not errors.
Rest assured that The Florida Bar still has many pending investigations with these foreclosure firms and they have authority overseeing the misconduct of their members.
I am your voice, America. I share your fears, read your concerns and do try my best to reach out to you.
The Florida Constitution and court rules did not give the Chief Justice authority to intercede in pending cases involving attorney misconduct, or to investigate allegations of fraud or misconduct in foreclosure cases. The fraud cases must first beadjudicated in trial courts.
Congressman Grayson has asked the Florida Bar to take action.
Florida Default Law Group has been added as the fourth law firm under investigation along the Law offices of David J. Stern, Shapiro & Fishman and Law Office of Marshall Watson.
Please welcome Ericka Johnson Seck to the ROBO-SIGNER Hall of Sham!
MERS & LPS once again the “Common Thread”
Here is a list of her many Corporate Hats:
Vice President of Mortgage Electronic Registration Systems Inc. (MERS)
Vice President of Deutsch Bank National Trust
Vice President of Bank of New York
Attorney in Fact of IndyMac
Attorney in Fact of ONEWEST
Attorney in Fact of FDIC
I must confess, she was my first study because she signed two assignments for “one” of my properties using “two” different employers. 🙂 ‘<blush> I even created my very first youtube video in her honor (see below)!
Thanks to Judge Arthur Schack and Tom Ice from Ice Legal in Palm Beach County, we all became familiar with Erica for wearing too many corporate hats.
She is the “Robo-Signer” Judge Schack called out in three particular cases in NY and made her an instant foreclosure household name. I don’t think she ever emerged in NY soon after this. Also see the HSCB v. Yasmin case.
Excerpt of DEUTSCHE BANK NATIONAL TRUST v. HARRIS
The Court is perplexed as to why the assignment was not executed in Pasadena, California, at 46U Sierra Madre Villa, the alleged “principal place of business” for both the assignor and the assignee. In my January 3 1, 2008 decision (Deutsche Bank National Tr (1st Canpuny v Maraj, – Misc 3d – [A], 2008 NY Slip Op 50176 [U]), I noted that Erica Johnson-Seck, claimed that she was a Vice President of MERS in her July 3,2007 INDYMAC to DEUTSCHE BANK assignment, and then in her July 3 1,2007 affidavit claimed to be a DEUTSCHE BANK Vice President. Just as in Deutsche Bank National Trust Company v Maraj, at 2, the Court in the instant action, before granting itn application for an order of reference, requires an affidavit from Ms. Johnson-Seck, describing her employment history for the past three years.
Further, the Court requires an explanation from an officer of plaintiff DEUTSCHE BANK as to why, in the middle of our national subprime mortgage financial crisis, DEUTSCHE BANK would purchase a non-perferforming loan from INDYMAC, and why DEUTSCHE BANK, INDYMAC and MERS all share office space at 460 Sierra Madre Villa, Pasadena, CA 91 107.
24,000 Monthly Documents executed by her team
Now Lets move on to this below… according to this deposition her office signs 24,000 mortgage related documents out of the this figure she signed about “750” a week making it approximately 3000 mortgage documents used in foreclosure cases. Anything from Affidavits of Debt, Lost Note Affidavits, Assignment of Mortgages, Declarations pretty much anything having to deal with Bankruptcy and Foreclosures.
This is what she signs without any notary present.
See where Judge Schack takes this and even if not mentioned he makes reference to MERS. Every judge must follow his example and read and research each case because it the end “each case is unique”.If we can only make a rubber stamp weigh 2 tons?? Hmm
By GREGORY BRESIGER Last Updated: 1:29 AM, September 26, 2010 Posted: 1:07 AM, September 26, 2010
With foreclosure filings growing by the month, some judges are holding banks and loan servicers’ feet to the fire to prove they “own” the mortgage and that they know what information is in the filing.
Recently, JPMorgan Chase, a mortgage servicer, was charged by a Florida judge with submitting fraudulent foreclosure paperwork on a home it did not own.
Ally Bank, formerly GMAC, the credit arm of the troubled automaker General Motors, suspended foreclosure proceedings in 23 states including New York last week, while it reviews its foreclosure procedures.
Ally, which has a $349.1 billion mortgage portfolio, according to industry records, and was also the beneficiary of more than $17 billion in US bailout funds, said this week it has amended its foreclosure procedure to make sure the documents contain truthful information and that there is a notary present when documents are signed.
Closer to home, in New York State Supreme Court no foreclosure hearing is routine in Judge Arthur Schack’s courtroom in Brooklyn. That’s where dozens of bank attorneys are learning that every detail must be right or else.
Judge Schack — the scourge of numerous banks and poorly prepared attorneys — has thrown out dozens of foreclosure applications for just the same reasons cited in Florida.
Judge Schack examines every filing in detail. That’s because “every case is unique,” said the 64-year-old judge, a former high-school social-studies teacher.
Why the large number of foreclosure dismissals for a procedure that is often routinely granted?
Thank you to our friends at American United For Justice for providing this mind blowing audio on a conference Mr. Stern held for DJSP investors. These are some of the highlights of this conference in no particular order. Read it carefully and don’t miss the audio below.
“We take em’ from cradle to grave.”
David Stern, President and CEO of DJSP Enterprises, Inc.
His baseball pitch-
One of my favorite questions from one of my believers, one of my investors on the first call-in, “What inning are we in? If this was a baseball game, what inning are we in?” And my response is, we’re only in the 2nd inning. We still have 3 innings of foreclosures left, and after the foreclosures, we have 3 innings of REO liquidation and as the REO liquidations pan out, we get into the re-fi and we get into the origination.
[ . . . ]
So yeah, we’re in the 2nd inning, but guess what – when we get to the 9th inning, it’s going to be a doubleheader and we got a second game coming. So when people say, “Oh my God, the economy is bad!” I’m like, “Oh my God, it’s great.” I mean, I hate to hear people are losing their homes and credit isn’t available and credit is such that they can’t re-fi, but if you are in our niche, it’s what we do and it’s what we want to see.
Crystal ball admission here-
No matter what Obama rolls out, there is no stopping this inflow of continued defaults that we anticipate to go for another two or three years late behind that is the math of REO’s that need to be liquidated and at the end of the day, the cycle will start again. Well, foreclosure volumes through 2012 are expected to increase dramatically and remain at high levels going on till 2017?
“Increase in Modification Services… This is what Obama rolled out. . Home Affordable Modification Program. Unfortunately, it’s what…folks if you do what I do…unfortunately it is failing. We have the opportunity to handle the modification or where we do have a modification, we get to charge for title search, we get to charge for title exam, we get to charge for doc prep we get a 600.00 dollar incentive fee?
And at the end of the day when it’s all said, 66,000 have been done to date… of the 66,000 more than 20% have failed. So we can get the file in, we start with the foreclosure, we bill for the foreclosure, we get the mod in, we make the incentive, we doc prep, we get the title, the mod is done and guess what? It falls out. It all comes back to foreclosure land and we get to start the foreclosure all over again! So no matter what the Obama Administration brings our way. We have found a way to create a profit center on it and that I think is part of that success!”