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HUFFPO | CPAC Chief Is Partner In Law Firm Defending Foreclosure Mill, Served On Board Of Fannie Mae

HUFFPO | CPAC Chief Is Partner In Law Firm Defending Foreclosure Mill, Served On Board Of Fannie Mae


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WASHINGTON — The new head of the American Conservative Union, the group which hosts the annual Conservative Political Action Conference, has ties to the ongoing controversy surrounding fraud in the foreclosure process.

New ACU leader Al Cardenas is a partner in the law firm of Tew Cardenas LLP, which is currently defending “foreclosure king” David Stern, whose own law office is at the center of a major Florida investigation into foreclosure fraud. Mortgage companies hire the Law Offices of David J. Stern, frequently referred to as a “foreclosure mill,” to handle their foreclosure paperwork for them. Stern’s employees have testified that the office was a hotbed for illegally robo-signed foreclosure documents, with some employees churning out 1,000 improperly signed documents every day.

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BLOOMBERG | The rise and fall of a foreclosure king

BLOOMBERG | The rise and fall of a foreclosure king


By MICHELLE CONLIN – Feb 6, 2011 7:29 PM ET
By The Associated Press

FORT LAUDERDALE, Fla. (AP) — During the housing crash, it was good to be a foreclosure king. David Stern was Florida’s top foreclosure lawyer, and he lived like an oil sheik. He piled up a collection of trophy properties, glided through town in a fleet of six-figure sports cars and, with his bombshell wife, partied on an ocean cruiser the size of a small hotel.

When homeowners fell behind on their mortgages, the banks flocked to “foreclosure mills” like Stern’s to push foreclosures through the courts on their behalf. To his megabank clients — Bank of America, Goldman Sachs, GMAC, Citibank and Wells Fargo — Stern was the ultimate Repo Man.

At industry gatherings, Stern bragged in his boyish voice of taking mortgages from the “cradle to the grave.” Of the federal government’s disastrous homeowner relief plan, which was supposed to keep people from getting evicted, he quipped: “Fortunately, it’s failing.”

The worse things got for homeowners, the better they got for Stern.

That is, until last fall, when the nation’s foreclosure machine blew apart and Stern’s gilded world came undone. Within a few months, Stern went from being the subject of a gushing magazine profile to being the subject of a Florida investigation, class-action lawsuits and blogger Schadenfreude that, at last long, the “foreclosure king” was dead.

“What Stern represents is an industry that was completely unrestrained, unchecked, unpunished and unsupervised,” says Florida defense attorney Matt Weidner. “This was business gone wild.”

The rise and fall of Stern, now 50, provides an inside look at how the foreclosure industry worked in the last decade — and how it fell apart. It also shows how banks, together with their law firms, built a quick-and-dirty foreclosure machine that was designed to take as many houses as fast as possible.

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AMENDED |NEW YORK FORECLOSURE CLASS ACTION AGAINST STEVEN J. BAUM & MERSCORP

AMENDED |NEW YORK FORECLOSURE CLASS ACTION AGAINST STEVEN J. BAUM & MERSCORP


Class Action Attorney Susan Chana Lask targets Foreclosure Mill Attorneys as source of foreclosure crisis.

This is the amended complaint against Foreclosure Mill Steven J. Baum and MERSCORP.

Want to join the Class? No problem!

Please contact: SUSAN CHANA LASK, ESQ.

[ipaper docId=37881265 access_key=key-2hj0jnnmfxmm0i37q7l0 height=600 width=600 /]

Related posts:

CLASS ACTION | Connie Campbell v. Steven Baum, MERSCORP, Inc

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CLASS ACTION AMENDED against MERSCORP to include Shareholders, DJSP

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Posted in assignment of mortgage, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Law Office Of Steven J. Baum, Law Offices Of David J. Stern P.A., MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., notary fraud, note, racketeering, RICO, Steven J Baum, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, Susan Chana Lask, Trusts, truth in lending act, Wall StreetComments (2)

Foreclosure Mills move to Quash Subpoenas served upon them

Foreclosure Mills move to Quash Subpoenas served upon them


Today an article was released about the the foreclosure mills moving forward to quash the subpoenas served upon them by the Florida Attorney General. In this article there was a tad bit of heresay going on…

One of the firms is represented by WPB attorney Gerry Richman:

The subpoena has had a chilling effect on clients and has led to defense lawyers citing the investigation in motions to have the Shapiro firm disqualified from cases. One judge, according to the petition, has said in open court he will deny all summary judgment motions filed by the law firms named by the attorney general based solely on the existence of the investigation.

In an interview, attorney Gerald Richman, who is representing the Shapiro firm, said he did not know who the judge is. He denied the Shapiro firm falsified any documents.

“One of our concerns is the broad brush,” he said. “We are not in the category with David Stern, we are not in the category with any other law firm. Hopefully we will not lose clients. We’re doing whatever we can to fight back.”

Ok, well how can anyone make such a statement without clarifying who the judge is? This is clear speculation!

The Attorney General’s office is fighting back stating the facts…

McCollum spokeswoman Sandi Copes responded, “our office is responsible for protecting consumers year-round, and this investigation has been ongoing for some time.”

Last is information requesting from David J. Stern regarding the subpoena from the AG…

“This request would include entities that have nothing to do with the Law Firm’s legal practice, e.g., if David J. Stern owns a piece of real estate in an entity or he has trusts set up for his family,” according to the petition filed by Stern’s attorney, Jeffrey Tew of Miami. “This request should be narrowed to include entities that have a connection with his legal practice.”

This statement is clearly hiding some important crucial information. Rumor has it but not confirmed that some Foreclosure Mills have been stocking up on real estate they foreclosed on into trusts. Again this is just a RUMOR!

I say keep on digging…eventually an ant hole will turn into a sink hole!

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Posted in chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, djsp enterprises, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, investigation, Law Offices Of David J. Stern P.A., Real Estate, shapiro & fishman pa, STOP FORECLOSURE FRAUD, TrustsComments (2)

Florida Bar investigating “Foreclosure Mill” David J. Stern and DJSP Enterprises

Florida Bar investigating “Foreclosure Mill” David J. Stern and DJSP Enterprises


Friday, August 20, 2010

Florida Bar previously disciplined Stern

South Florida Business Journal – by Paul Brinkmann

David J. Stern, an attorney who is the target of a state civil investigation for mortgage fraud complaints, was previously disciplined by the Florida Bar for deceiving the courts and clients about his web of businesses that do legal support work.

The Bar also confirmed Aug. 16 that it is also investigating Stern for numerous allegations of violating attorney regulations, including whether his running of DJSP Enterprises, a publicly traded company, is in compliance.

Stern represents banks that are attempting to foreclose on residential mortgages. Stern, his law firm and DJSP Enterprises are exemplary of the wave of attorneys who have benefitted from the flood of foreclosures that gripped the nation over the last three years.

Stern received a public reprimand in 2002 for billing practices that made it appear he was paying other companies for work on title insurance, when he was actually using in-house staff.

Stern settled the 2002 Bar complaint by consenting to the reprimand before the Bar’s board of governors. In the reprimand, Bar President Tod Aronovitz said Stern’s practices were “misleading” to the courts and foreclosure defendants.

This summer, Stern is facing allegations that he has been similarly misleading to the courts. On Aug. 10, Florida Attorney General Bill McCollum said he was investigating Stern and two other law firms for allegations of unfair and deceptive actions in their handling of foreclosure cases.

Fabrications in the name of speed

It is alleged that the firms, in representing lenders, may have fabricated mortgage assignments in order to speed up the foreclosure process.

Stern’s attorney, Jeffrey Tew, has brushed off McCollum’s announcement by saying that Stern handled 100,000 cases in the last few years, and a few mistakes were inevitable.

Tew said this week that resolving the 2002 Bar complaint also involved Stern agreeing to have all staff who perform title insurance work to be on the payroll of a separate title company.

Tew, of Miami-based Tew Cardenas LLP, said any alleged deception from the 2002 complaint “was inadvertent on David’s part,” and “there hasn’t been any Bar discipline since 2002.”

Tew said Stern employs 1,200 paralegals in Plantation, and may have turned to using staff in Manila, Philippines, partly due to a lack of space.

“The Bar has approved the use of paralegals in other countries,” Tew said. “DJSP has a group of paralegals in Manila. He doesn’t necessarily have room for more here, and it may be partly related to pay scales also.”

Continue reading… Florida Bar previously disciplined Stern – South Florida Business Journal

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RELATED STORIES:

Full Deposition of David J. Stern’s Notary | Para Legal Shannon Smith

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STERN’S CHERYL SAMONS| SHANNON SMITH Assignment Of Mortgage| NOTARY FRAUD!

[ipaper docId=34497819 access_key=key-1v3hmd3whnpyout9rn6l height=600 width=600 /]

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Posted in concealment, conflict of interest, CONTROL FRAUD, corruption, djsp enterprises, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, investigation, Law Offices Of David J. Stern P.A., Mortgage Foreclosure Fraud, notary fraud, settlement, stock, STOP FORECLOSURE FRAUD, ViolationsComments (0)

Fannie and Freddie Continue to Rely on Foreclosure Mills Despite Evidence of Fraud

Fannie and Freddie Continue to Rely on Foreclosure Mills Despite Evidence of Fraud


Posted by Yves Smith at 6:08 am

A good piece at Mother Jones, “Fannie and Freddie’s Foreclosure Barons” (hat tip Foghorn Leghorn) provides a window on a seamy big business: cut rate foreclosure processing machines that routinely ride roughshod over borrowers and the law.

Unfortunately, space limitations prevent the story from going deeply into some critical issues. The piece does a good job of explaining how these cut rate legal services operations are creations of Fannie and Freddie and illustrating how they are engaging in fabricating documents. The story focuses on a specific bad actor, a law firm founded by David Stern that handles roughly 1/5 of the foreclosures in Florida:

Ariane Ice sat poring over records on the website of Florida’s Palm Beach County…She and her husband, Tom, an attorney, ran a boutique foreclosure defense firm called Ice Legal…. Ice had a strong hunch that Stern’s operation was up to something, and that night she found her smoking gun.

It involved something called an “assignment of mortgage,” the document that certifies who owns the property and is thus entitled to foreclose on it….By law, a firm must execute (complete, sign, and notarize) an assignment before attempting to seize somebody’s home.

A Florida notary’s stamp is valid for four years, and its expiration date is visible on the imprint. But here in front of Ice were dozens of assignments notarized with stamps that hadn’t even existed until months—in some cases nearly a year—after the foreclosures were filed. Which meant Stern’s people were foreclosing first and doing their legal paperwork later. In effect, it also meant they were lying to the court—an act that could get a lawyer disbarred or even prosecuted. “There’s no question that it’s pervasive,” says Tom Ice of the backdated documents—nearly two dozen of which were verified by Mother Jones. “We’ve found tons of them.”

This all might seem like a legal technicality, but it’s not. The faster a foreclosure moves, the more difficult it is for a homeowner to fight it—even if the case was filed in error. In March, upon discovering that Stern’s firm had fudged an assignment of mortgage in another case, a judge in central Florida’s Pasco County dismissed the case with prejudice—an unusually harsh ruling that means it can never again be refiled. “The execution date and notarial date,” she wrote in a blunt ruling, “were fraudulently backdated, in a purposeful, intentional effort to mislead the defendant and this court.”…

But the Ices had uncovered what looked like a pattern, so Tom booked a deposition with Stern’s top deputy, Cheryl Samons, and confronted her with the backdated documents—including two from cases her firm had filed against Ice Legal’s clients. Samons, whose counsel was present, insisted that the filings were just a mistake. She refused to elaborate, so the Ices moved to depose the notaries and other Stern employees whose names were on the evidence. On the eve of those depositions, however, the firm dropped foreclosure proceedings against the Ices’ clients.

It was a bittersweet victory: The Ices had won their cases, but Stern’s practices remained under wraps. “This was done to cover up fraud,” Tom fumes. “It was done precisely so they could try to hit a reset button and keep us from getting the real goods.”

Backdated documents, according to a chorus of foreclosure experts, are typical of the sort of shenanigans practiced by a breed of law firms known as “foreclosure mills.” ….The mills think “they can just change things and make it up to get to the end result they want, because there’s no one holding them accountable,” says Prentiss Cox, a foreclosure expert at the University of Minnesota Law School. “We’ve got these people with incentives to go ahead with foreclosures and flood the real estate market.”

Yves here. This is far from the only form of document forgeries. A widespread abuse is what bankruptcy attorney Max Gardner calls the “alphabet problem.”

Mortgage securitizations were very carefully designed to satisfy a number of concerns. One of them was bankruptcy remoteness, that if an originator failed, as Countrywide, New Century, IndyMac and a host of others did, that the creditors in the bankruptcy would not be able to claw mortgages back out of securitizations (assets sold close to the date of a bankruptcy may be deemed to have been conveyed fraudulently, and thus can be seized by the court on behalf of the creditors).

To prevent this from occurring, the Pooling and Servicing Agreement (the master document that governs the securitization) would provided for a minimum of two independent legal entities to sit between the originator and the trust that would hold the mortgages being securitized (technically, the note, which is the IOU; the mortgage, which is a lien, follows the note in 45 states). So the prescribed minimum number of steps was A (originator) => B => C => D (trust). Some securitizations (for reasons unrelated to establishing bankruptcy remoteness) would provide for even more steps.

Keep in mind that the PSA also required that the notes be conveyed to the trust, with the proper chain of endorsements, by closing; certain exceptions and fixes were permitted up to 90 days after closing, but these would be applicable only to a very small proportion of the pool.

Continue Reading…NakedCapitalism

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Posted in CONTROL FRAUD, djsp enterprises, fannie mae, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Freddie Mac, ice law, Law Offices Of David J. Stern P.A., MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Notary, notary fraud, note, RICO, STOP FORECLOSURE FRAUDComments (2)

EXCLUSIVE: Fannie and Freddie’s Foreclosure Barons

EXCLUSIVE: Fannie and Freddie’s Foreclosure Barons


How the federal housing agencies—and some of the biggest bailed-out banks—are helping shady lawyers make millions by pushing families out of their homes.

— By Andy Kroll

Wed Aug. 4, 2010 12:01 AM PDT

LATE ONE NIGHT IN February 2009, Ariane Ice sat poring over records on the website of Florida’s Palm Beach County. She’d been at it for weeks, forsaking sleep to sift through thousands of legal documents. She and her husband, Tom, an attorney, ran a boutique foreclosure defense firm called Ice Legal. (Slogan: “Your home is your castle. Defend it.”) Now they were up against one of Florida’s biggest foreclosure law firms: Founded by multimillionaire attorney David J. Stern, it controlled one-fifth of the state’s booming market in foreclosure-related services. Ice had a strong hunch that Stern’s operation was up to something, and that night she found her smoking gun.

It involved something called an “assignment of mortgage,” the document that certifies who owns the property and is thus entitled to foreclose on it. Especially these days, the assignment is key evidence in a foreclosure case: With so many loans having been bought, sold, securitized, and traded, establishing who owns the mortgage is hardly a trivial matter. It frequently requires months of sleuthing in order to untangle the web of banks, brokers, and investors, among others. By law, a firm must execute (complete, sign, and notarize) an assignment before attempting to seize somebody’s home.

A Florida notary’s stamp is valid for four years, and its expiration date is visible on the imprint. But here in front of Ice were dozens of assignments notarized with stamps that hadn’t even existed until months—in some cases nearly a year—after the foreclosures were filed. Which meant Stern’s people were foreclosing first and doing their legal paperwork later. In effect, it also meant they were lying to the court—an act that could get a lawyer disbarred or even prosecuted. “There’s no question that it’s pervasive,” says Tom Ice of the backdated documents—nearly two dozen of which were verified by Mother Jones. “We’ve found tons of them.”

This all might seem like a legal technicality, but it’s not. The faster a foreclosure moves, the more difficult it is for a homeowner to fight it—even if the case was filed in error. In March, upon discovering that Stern’s firm had fudged an assignment of mortgage in another case, a judge in central Florida’s Pasco County dismissed the case with prejudice—an unusually harsh ruling that means it can never again be refiled. “The execution date and notarial date,” she wrote in a blunt ruling, “were fraudulently backdated, in a purposeful, intentional effort to mislead the defendant and this court.”

Stern has made a fortune foreclosing on homeowners. He owns a $15 million mansion, four Ferraris, and a 130-foot yacht.

More often than not in uncontested cases, missing or problematic documents simply go overlooked. In Florida, where foreclosure cases must go before a judge (some states handle them as a bureaucratic matter), dwindling budgets and soaring caseloads have overwhelmed local courts. Last year, the foreclosure dockets of Lee County in southwest Florida became so clogged that the court initiated rapid-fire hearings lasting less than 20 seconds per case—”the rocket docket,” attorneys called it. In Broward County, the epicenter of America’s housing bust, the courthouse recently began holding foreclosure hearings in a hallway, a scene that local attorneys call the “new Broward Zoo.” “The judges are so swamped with this stuff that they just don’t pay attention,” says Margery Golant, a veteran Florida foreclosure defense lawyer. “They just rubber-stamp them.”

But the Ices had uncovered what looked like a pattern, so Tom booked a deposition with Stern’s top deputy, Cheryl Samons, and confronted her with the backdated documents—including two from cases her firm had filed against Ice Legal’s clients. Samons, whose counsel was present, insisted that the filings were just a mistake. She refused to elaborate, so the Ices moved to depose the notaries and other Stern employees whose names were on the evidence. On the eve of those depositions, however, the firm dropped foreclosure proceedings against the Ices’ clients.

It was a bittersweet victory: The Ices had won their cases, but Stern’s practices remained under wraps. “This was done to cover up fraud,” Tom fumes. “It was done precisely so they could try to hit a reset button and keep us from getting the real goods.”

Backdated documents, according to a chorus of foreclosure experts, are typical of the sort of shenanigans practiced by a breed of law firms known as “foreclosure mills.” While far less scrutinized than subprime lenders or Wall Street banks, these firms undermine efforts by government and the mortgage industry to put struggling homeowners back on track at a time of record foreclosures. (There were 2.8 million foreclosures in 2009, and 3.8 million are projected for this year.) The mills think “they can just change things and make it up to get to the end result they want, because there’s no one holding them accountable,” says Prentiss Cox, a foreclosure expert at the University of Minnesota Law School. “We’ve got these people with incentives to go ahead with foreclosures and flood the real estate market.”

PAPER TRAIL

View the documents featured in this story:

Federal Securities Fraud Suit, Cooper and Methi v. DJSP Enterprises, David J. Stern, and Kumar Gursahaney, July 2010

Class Action Racketeering Suit, Figueroa v. MERSCORP, Law Offices of David J. Stern, and David J. Stern, July 2010

Fair Debt Collection Violation Suit, Hugo San Martin and Melissa San Martin v. Law Offices of David J. Stern, July 2010

Class Action Suit for Fair Debt Collecting Violations, Rory Hewitt v. Law Offices of David J. Stern and David J. Stern, October 2009

Florida Bar, Public Reprimand, Complaint Against David J. Stern, Sept. 2002

Florida Bar, Public Reprimand, Consent Judgment Against David J. Stern, Oct. 2002

Freddie Mac Designated Counsel, Retention Agreement with Law Offices of David J. Stern, April 2003

Freddie Mac Designated Counsel, Memo to Law Offices of David J. Stern, March 2006

Amended Complaint Alleging Sexual Harassment, Bridgette Balboni v. Law Offices of David J. Stern and David J. Stern, July 1999

Stern’s is hardly the only outfit to attract criticism, but his story is a useful window into the multibillion-dollar “default services” industry, which includes both law firms like Stern’s and contract companies that handle paper-pushing tasks for other big foreclosure lawyers. Over the past decade and a half, Stern has built up one of the industry’s most powerful operations—a global machine with offices in Florida, Kentucky, Puerto Rico, and the Philippines—squeezing profits from every step in the foreclosure process. Among his loyal clients, who’ve sent him hundreds of thousands of cases, are some of the nation’s biggest (and, thanks to American taxpayers, most handsomely bailed out) banks—including Wells Fargo, Bank of America, and Citigroup. “A lot of these mills are doing the same kinds of things,” says Linda Fisher, a professor and mortgage-fraud expert at Seton Hall University’s law school. But, she added, “I’ve heard some pretty bad stories about Stern from people in Florida.”

While the mortgage fiasco has so far cost American homeowners an estimated $7 trillion in lost equity, it has made Stern (no relation to NBA commissioner David J. Stern) fabulously rich. His $15 million, 16,000-square-foot mansion occupies a corner lot in a private island community on the Atlantic Intracoastal Waterway. It is featured on a water-taxi tour of the area’s grandest estates, along with the abodes of Jay Leno and billionaire Blockbuster founder Wayne Huizenga, as well as the former residence of Desi Arnaz and Lucille Ball. (Last year, Stern snapped up his next-door neighbor’s property for $8 million and tore down the house to make way for a tennis court.) Docked outside is Misunderstood, Stern’s 130-foot, jet-propelled Mangusta yacht—a $20 million-plus replacement for his previous 108-foot Mangusta. He also owns four Ferraris, four Porsches, two Mercedes-Benzes, and a Bugatti—a high-end Italian brand with models costing north of $1 million a pop.

Despite his immense wealth and ability to affect the lives of ordinary people, Stern operates out of the public eye. His law firm has no website, he is rarely mentioned in the mainstream business press, and neither he nor several of his top employees responded to repeated interview requests for this story. Stern’s personal attorney, Jeffrey Tew, also declined to comment. But scores of interviews and thousands of pages of legal and financial filings, internal emails, and other documents obtained by Mother Jones provided insight into his operation. So did eight of Stern’s former employees—attorneys, paralegals, and other staffers who agreed to talk on condition of anonymity. (Most still work in related fields and fear that speaking publicly about their ex-boss could harm their careers.)

Continue readingMOTHER JONES

Andy Kroll is a reporter at Mother Jones. For more of his stories, click here. Email him with tips and insights at akroll (at) motherjones (dot) com. Follow him on Twitter here.

— Illustration: Lou Beach

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Posted in chain in title, class action, CONTROL FRAUD, djsp enterprises, fannie mae, FDLG, florida default law group, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, Freddie Mac, investigation, Law Offices Of David J. Stern P.A., notary fraud, racketeering, RICO, robo signers, stock, STOP FORECLOSURE FRAUD, Wall StreetComments (1)


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