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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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FULL DEPOSITION OF LAW OFFICES OF DAVID J. STERN BETH CERNI

FULL DEPOSITION OF LAW OFFICES OF DAVID J. STERN BETH CERNI


Excerpts:

4 Q. So all of the client files, all of your
5 clients have a file in that system, and you maintain
6 records relating to that client in these files?
7 A. No. Specific clients are in specific
8 systems. So you update only those clients that are in
9 that particular system.
10 Q. Okay. What system would MERS be in?
11 A. MERS isn’t in the system.
12 Q. They’re not? What about GMAC Mortgage, LLC?
13 A. They’re NewTrack.
14 Q. What other systems do you use for the — for
15 the clients, for your clients?
16 A. It depends upon the client.
17 Q. Can you give me some examples of the systems?
18 A. Um, we have Lendstar, we have Vendorscape,
19 those are the two that I have used.
20 Q. And you’ve also used NewTrack?
21 A. Yes, ma’am.
22 Q. What type of information do you keep in the
23 systems?
24 A. We have to update when hearings are
25 scheduled, when service is complete for the clients.

1 Q. Do you also keep in those systems,
2 information as to when the lawsuit is filed, when
3 assignments are executed, when affidavits are
4 executed?
5 A. When complaints are filed, yes.
6 Q. But not when assignments are executed or
7 affidavits are executed?
8 A. No.
9 Q. Is that information kept in another software
10 program?
11 A. Not to my knowledge.

<SNIP>

1 A. It’s a form. It’s the same form for every
2 assignment.

3 Q. So you do not read them?
4 A. They’re checked by an attorney before I sign.
5 Q. So you rely on the attorney?
6 A. Yes.
7 Q. Okay. Also, in this document it indicates
8 that “Mortgage Electronic Registration Systems, Inc.,
9 residing or located at care of GMAC Mortgage, LLC,”
10 what does that mean?

11 A. The address of the servicer.
12 Q. So Mortgage Electronic Registration System is
13 the servicer?

14 A. Mortgage Electronic Registrations is who
15 the — the mortgage apparently was sitting in the name
16 of for this file at the time.

17 Q. And GMAC is the servicer?
18 A. Correct.
19 Q. What does that phrase residing or located at
20 care of mean?
21 A. That’s an address.
22 Q. So MERS is physically located at GMAC
23 Mortgage, LLC?

24 A. I don’t know.
25 Q. Don’t know. Do you have access to any of the

1 title work, or any other information before you
2 execute the assignments of mortgage?
3 A. It’s in the file that’s been reviewed by the
4 attorney.
5 Q. So you don’t review them yourself?
6 A. No. It’s been reviewed by the attorney.
7 Q. Are you — what provides you the
8 authorization to sign?
9 You notice on the assignment, that you’re
10 executing it as Assistant Secretary of Mortgage
11 Electronic Registration System; is that correct?
12 A. Correct.
13 Q. So before I asked you if you were employed by
14 any other corporations, you indicated that you were
15 not. What does it mean when you hold the position of
16 Assistant Secretary of Mortgage Electronic
17 Registration Systems, Inc.?
18 A. We have power of attorney.
19 Q. And what does that mean?
20 A. That we had authorization to sign on behalf
21 of.
22 Q. And did you obtain that power of attorney?
23 A. No, I did not.
24 Q. Did you — do you know anything about the
25 negotiations leading up to the execution of that power

1 of attorney?
2 A. No.

<SNIP>

23 Q. If you’ll take a look at the first document
24 that I handed to you, the Lis Pendens and complaint.
25 If you look, there’s a document attached to that as

1 Exhibit A. And who is listed as the lender on that
2 document?
3 A. It says MERS.
4 Q. And does it, a little bit further down, also
5 say Taylor, Bean, and Whitaker Mortgage Corporation,
6 “lender —
7 A. Uh-huh.
8 Q. — is organized and existing under the laws
9 of?”
10 A. Uh-huh.
11 Q. Do you have any documents — did you have any
12 documents in your file relating to Taylor, Bean and
13 Whitaker Mortgage Corporation at the time you executed
14 the assignment?
15 A. I don’t know.
16 Q. Would you have looked at the original
17 mortgage prior to executing the assignment?
18 (Brief telephonic interruption.)
19 THE WITNESS: No. Again, they were reviewed
20 by an attorney.

Continue to the depo below…

[ipaper docId=41044236 access_key=key-1s17qv7pitz1rmk5i19t height=600 width=600 /]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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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

_________________________

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)

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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