The Briscoe Law Firm, PLLC and Cash Powers Taylor, LLP Announce the Investigation of Possible Breaches of Fiduciary Duties Against the Officers and Directors of DJSP Enterprises, Inc.

DALLAS, Jul 28, 2010 (BUSINESS WIRE) — The Briscoe Law Firm, PLLC, founded by a former state prosecutor and enforcement attorney for the United States Securities and Exchange Commission, and the law firm of Cash Powers Taylor, LLP are investigating potential legal claims available to purchasers of DJSP Enterprises, Inc. (“DJSP” or “Company”) /quotes/comstock/15*!djsp/quotes/nls/djsp (DJSP 3.95, +0.07, +1.85%) during the period of March 16, 2010 and May 27, 2010.

DJSP and certain of its officers and directors allegedly violated the Securities Exchange Act of 1934 by issuing materially false and misleading statements and failing to disclose certain facts known to them regarding the Company’s business and financial results. Specifically, on March 11, 2010, the Company issued statements assuring investors that it would continue to profit and earn revenue as usual, despite the Obama Administration’s efforts to curb real estate foreclosures. Additionally, the Company stated that DJSP would continue to be profitable in subsequent years and that its business would not be affected by the government’s involvement in the mortgage markets. However, in April 2010, when the Company’s largest clients began real estate foreclosure conversion systems, DJSP revenue from mortgage foreclosure began to substantially decline. As a result of defendants’ false statements, DJSP’s stock traded at artificially inflated prices during the Class Period.

If you currently own or purchased DJSP shares and would like additional information regarding this investigation or if you have information regarding the allegations against the company, please contact Patrick Powers at Cash Powers Taylor, LLP, toll free (877) 728-9607, via e-mail at patrick@cptlawfirm.com, or The Briscoe Law Firm, PLLC toll free (877) 397-5991, or via email at WBriscoe@TheBriscoeLawFirm.com. There is no cost or fee to you.

The Briscoe Law Firm is a full service business litigation, commercial transaction, and public advocacy firm with more than 20 years of experience in complex litigation and transactional matters.

Cash Powers Taylor, LLP is a boutique litigation law firm that handles a variety of complex business litigation matters, including claims of investor and stockholder fraud, shareholder oppression, shareholder derivative suits, and security class actions.

SOURCE: Cash Powers Taylor, LL

WITH ALL THESE SERIOUS ALLEGATIONS, HOW CAN OUR CIRCUIT COURT JUDGES CONTINUE TO GRANT FORECLOSURE?

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The failure to identify what parties are really at risk in litigation prevents courts, policy makers, investors and the general public from knowing who stands to win or lose in litigation.  Concealing the identity of the real party in interest allows those who made bad decisions to shirk their responsibility in the litigation, a fact that is more important when their conduct could very well make them complicit in creating the situation that led to the litigation.  On a very practical level, litigation pursued by servicers probably prohibits effective settlement or mediation discussions because they lack the risk of loss that forces effective resolutions.  The consequences of this are played out hundreds of thousands of times a day as homeowners try futilely to negotiate a short sale or modification with the lender.  This is especially important now that circuits across the state are rolling out mediation programs.

FORECLOSURE MEDIATION IS NOT GOING TO WORK UNLESS THE REAL PARTIES IN INTEREST ARE IN THE COURTROOM

The fact that mediations are not going to work until we have real players at the table will be borne out in the months to come.  Certainly borrowers will share some of the blame for not actively participating in the mediation and settlement discussions, but at the end of the day, another bank owned property is a loss for all parties involved….there are too many of these properties already.

The key to addressing this problem is to first attack the Plaintiff’s capacity.  The first part of the attack is the fact that most Plaintiffs are never properly identified in the lawsuit.  Courts must begin to demand knowing just exactly where this company comes from that is bringing this action.  Courts must begin to ask, “Who am I about to grant this $250,000 judgment to?”  then not let the case proceed until they have a very clear answer to that question.

Our State Division of Corporations or Department of Financial Services must begin to demand registration of all these nominal and real plaintiffs.  Specific laws are already on the books that demand registration of foreign corporations and of all trusts, but these registration requirements are being totally ignored.

OUR STATE IS IGNORING MILLIONS OF DOLLARS IN TAX REVENUE AND FAILING TO PROVIDE APPROPRIATE REGULATORY OVERSIGHT BY IGNORING THESE LAWS.

Once the nominal plaintiff is properly identified, it’s time to demand proof that they have the authority to maintain the litigation on behalf of the real party in interest.  This too is addressed by the capacity argument, but you must also be thinking about this in the context of preparing discovery, because the proof demanded will come in the form of the Plaintiffs responses to the discovery requests.

I have previously attached my capacity Motion to Dismiss and I can tell you that when the facts support this Motion, it is nearly impossible for the Plaintiffs to wiggle their way around.  Even the most bank-friendly judge will have problems denying this Motion and if the motion is denied, it sets up a very significant summary judgment or appeal issue. I’m going to work on this motion again to put some more recent circuit court cases into it, but as I’ve stated before…

CAPACITY IS A CASE KILLER!

Keep up the good fight!

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More will be detailed about this lawsuit in months to come.   For now, I encourage everyone to read this lawsuit carefully and share this lawsuit with judges, reporters and policy makers.  The lawsuit articulates many of the suspicions and the greatest fears held by many but who are unable to put those fears into words.  I give real credit to the courageous attorney who took on this effort and encourage all those who are in the fight to protect and defend our courts to support this effort.

sternclassaction

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The simple answer is money….I believe the lenders have been incentivized not to approve modifications from their own financial perspective because they are getting both tax and subsidy benefits from their non-performing portfolio.  The complex answer is I believe the program requirements are so complex and difficult to comply with that in order for the lender to obtain the subsidy benefits described above, they must obtain so many records and comply with strict documentary requirements.

The result is a maddening clash between servicers and homeowners who are working hard to obtain mortgage modifications.  I attach below a recent exchange between a homeowner who is working hard to resolve an outstanding mortgage claim….reading this will make you want to pull your hair out….

This letter is a demand for additional review of Bank of America’s recent denial of my home loan modification.  I have sent copies of this to various officials, agencies, and others via email or first class mail, which you can find listed below.

After careful review of your denial letter, I find your denial to contain fallacious reasoning—one which is nothing but a red herring,

Further, I have reviewed the PSA of CWALT 2005- 66 (which includes my loan) and the Guide referenced within this PSA, also known as Freddie Mac’s Single  Family Seller / Servicer Guide, which will be referred herein as the Guide.

Your letter states:

“The investor has declined request for modification. Since the loan is not delinquent, for both a traditional modification and to qualify for HAMP, you needed to demonstrate imminent default hardship. One of the imminent default is defined as a long term disability status after the origination of the subject loan. Based on the documentation provided by you, including your statement regarding receipt of Medicare since 2001, you were receiving assistance prior to the origination date of (2005). As such, you are not a borrower and further the loan is not in imminent default as the assistance you received existed prior to the subject loan origination.”

There are serious and potentially litigious issues brought up in the above statements:

1. You state: The investor has declined request for modification.

My response: Why is this up to the investor? The PSA clearly states “…the Master Servicer may waive, modify or vary any term of any Mortgage Loan ….”. See Section 3.11 (b) pp.49-50 (CWALT 2005-66)

2. You state: Since the loan is not delinquent, for both a traditional modification and to qualify for HAMP….

My response: One does NOT need to be late for HAMP; one needs to show a hardship where imminent default is likely. You (the servicer) are supposed to abide by the PSA.

Section 3.01 (b) of the PSA states that you SHALL follow certain rules/regulation such as Freddie Mac’s Single Family Seller / Servicer Guide which, states in part that:

“In pursuing loss mitigation, Servicers must first consider Borrowers in accordance with the requirements of Chapter C65, Home Affordable Modification Program.”

So, we turn to Chapter C65, which states in part:

Borrowers who are current ,…….. but who, due to hardship, may be in imminent default, are also eligible for modification under HAMP. See: C65. 4

See also: http://www.makinghomeaffordable.gov/borrower-faqs.html

See question #22 from the above link. Do I need to be behind on my mortgage payments to be eligible for a modification under HAMP?

No. Responsible homeowners who are struggling to remain current on their mortgage payments are eligible if they reasonably believe they are very likely to default on their mortgage soon (often referred to by loan servicers as “imminent default”). This might be because a homeowner has had (or will have) a significant increase in the mortgage payment (due to a payment adjustment or rate adjustment upwards); …. or some other significant reduction in income; or some other financial hardship that will make the mortgage unaffordable.

3. You state: ….you needed to demonstrate imminent default hardship.

My Response; I did demonstrate imminent default— Loss of household income, change in household circumstances, significant increase in the mortgage payment if the Truth in Lending statement is correct. This was all documented at length in my hardship letter.

4. You state: One of the imminent default is defined as a long term disability status after the origination of the subject loan.

My response. I understand that, but it doesn’t pertain to my case. This is the red herring.

Disability is NOT the main issue. The main issues for imminent default as detailed in my hardship are 1) Upcoming increase in the monthly mortgage payment in 2010, 2) Loss of household income & 3) change in household financial circumstances, 4) Rising costs of living expenses, and 5) I briefly mentioned disability. I only mentioned disability in the hardship letter to let you know that my chances of returning to work do not look good and because I receive disability payments.

5. You state:  Based on the documentation provided by you,

My response: Did you read my hardship letter?

6. You state: ….including your statement regarding receipt of Medicare since 2001, you were receiving assistance prior to the origination date of (2005).

My response: You asked me for this information and I provided it to you. I wasn’t sure why you wanted this information, but it now appears you are trying to divert the main issues and doing everything you can to block my attempts for an affordable loan mod.

Let me ask you—do you routinely ask others how long they have worked at a job and get such proof from the employer? If not, this act certainly appears to be discriminatory.

7. You state: As such, you are not a borrower

My response: This is a legal issue and you know that, especially due to the conflicting documents you sent to me. But if you insist that I am not a borrower– please file for a Satisfaction of the Mortgage since I signed the Adjustable Rate Rider promising to pay you every single month, among other things. Please review the Adjustable Rate Rider and the Rider to the Note for this predatory Pay Option Arm loan.

8. You state: …….and further the loan is not in imminent default

My response: You appear to be ignoring the facts that there will be a “significant increase” in the mortgage payments later this year, which is one of several reasons for my request for a loan modification now. Also, what about Loss of Household Income? What about the Change in Household Financial Circumstances and Rising Costs of Living Expenses?

9. You state: …as the assistance you received existed prior to the subject loan origination.

Like I said, this is a red herring. Please read my hardship letter.

I request an immediate review of my file and an immediate re-evaluation of my request for a modification. Your reasoning is faulty, and may be discriminatory. Please be assured I will do all I can to save my home, and I hope to be able to come to an agreement about an affordable loan modification in the very near future.

Thank you for your time into these serious matters.

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Why are we allowing billions of dollars in property and capital be transferred by judicial process to corporations that cannot be identified and who engaged in fraud and potentially criminal acts?

One thing we all need to be far more educated about is the fact that the named plaintiff in foreclosure cases is often times just that, a plaintiff in name only.  We know from depositions and the shifty maneuvering of lenders and their affiliates that the real parties pulling the strings are operating in the shadows.  We only begin to understand and appreciate that the Plaintiff doesn’t have real interest in the outcome of the case when their courthouse maneuvering is brought to the attention of judges…and this is often met with a shrug of the judicial shoulders.

How many ex-parte Motions to Substitute Party Plaintiff, Assignments of Bids or Post-Judgment Change in Certificate of Title Orders have been entered in courtrooms all across this state and across the country? (The answer is probably tens of thousands, but because no-one is watching, who knows?)

How many Assignments of Mortgage or Endorsement of Note were entered when the authority and veracity of these important documents was questionable at best. (The answer is definitely in the hundreds of thousands.)

How many foreclosure cases have been filed where the capacity of the plaintiff seeking to invoke the court’s power has been properly pled? (By my estimation the number is fewer than 10% of the cases filed in this circuit and I doubt whether this is number is higher in any other circuit.)

I get back to those key questions that continue to perplex me…..

Why are we allowing billions of dollars in property and capital be transferred by judicial process to corporations that cannot be identified and who engaged in fraud and potentially criminal acts?

Why are our circuit courts just ignoring basic elements of rules and law just so they can plow through these foreclosure cases?

Why the big rush to conclude these foreclosure cases?  What’s going to happen to all the foreclosure inventory?  Who can afford to purchase all the foreclosed REO homes?

For more on that last question, read another article that appeared on loansafe.org that reports lenders taking back more than 4,000 properties per month in South Florida.  This number will only accelerate as courts adopt the new Rocket Docket procedures, but what in the world are the lenders going to do with these properties once they get them….I’m thinking it will be a big case of, “Be careful what you wish for, because you might not like what you get……”

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… C: wait…

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The fraud and con is being played out in circuit courts all across the State of Florida.  It happens when a foreclosure case is first filed and the Plaintiff is not even properly identified at all. (i.e. Aurora Loan Servicing, US Bank, Deutsche Bank National Trust)  I see very few complaints where the Plaintiff properly identifies itself in a manner that would allow the court or any party involved to actually know who was bringing the action and who was dragging the homeowner into court. Accordingly, judges all across this state are granting billions of dollars in foreclosure judgments, but they have absolutely no idea who they are granting these judgments to.

There are any number of improper purposes behind the active efforts of lenders to conceal the real identity of the parties at interest in these foreclosure cases.  One of the key reasons it seems is to conceal the true magnitude of problems that are plaguing the financial institutions, trusts and investment vehicles that are invested in these trusts.  We know from depositions and other sources that the real parties in interest are working actively to keep themselves distanced from litigation….and they attempt to take title and salvage their losses after the case is concluded.  Why…

Well, read the two articles below:

Deutsche Bank Fined

Record Number of Foreclosures Cancelled

So how are our courts complicit in these con games?  When they allow substitution of party plaintiff, assignments of bids and when they grant judgments to entities that they cannot identify and which have no legitimate claim to the mortgages they are suing upon.

When is it going to stop?  When will we all have enough of the Great Cons that continue to be perpetrated on us by the Titans of Wall Street?

When will judges demand that the parties appearing before them have fulfilled the most basic requirement of pleading and establishing capacity before they can even open the courthouse door and certainly before they are permitted to take one more American’s home.

When will it stop?

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… CY: wait… I: wait… YCat: wait… C: wait…

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I also wonder whether judges will start examining David J. Stern cases more carefully in light of the allegations.

Read the full article here.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… CY: wait… I: wait… YCat: wait… C: wait…

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So far, the 17-month-old effort has delivered a permanent fix to less than 15% of the borrowers the administration said it could ultimately help. Through June, roughly 398,000 of the nearly 1.3 million homeowners who entered the program had been granted permanent fixes. But more than 520,000 borrowers have fallen out of HAMP.

It is important that borrowers continue to document all contact with the lenders and their agents, judges increasingly want to know what the borrower has done to try and resolve the situation.  Be prepared to show an accurate and detailed list of all communications with the lender to the judge as part of your arguments against foreclosure.

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So what if every lawyer and homeowner and advocate that was fighting cases in Pinellas County just gave up.  Threw in the towel and said to the banks….YOU CAN HAVE THIS STINKING HOME.  I can’t afford the insurance, taxes, repairs.  I’ve lost my job so I couldn’t even really pay half the mortgage that currently exists on the property.  If the AC goes or the roof blows off, I don’t have the money to pay it, so I tell you what…I can rent a comparable house or apartment for much less that the best and most unheard of modification would ever provide.

Forget about who really owns the mortgage or who has a right to foreclose or who is owed the debt or what non-registered trust or foreign corporation claims the right to own the home….anyone come and get it…What would become of the 33,000 homes that have now reverted back to the shadowy entities that are now trying to take the homes?  Who would purchase them?  Who could qualify for the mortgage?  Who would move in and take care of the grass and fix the problems?

The answer to the question is, there are not 33,000 people in Pinellas County that could step in and purchase these properties….there’s probably not even half that.  It will be very interesting to see what becomes of all the properties that are reverting back to banks in the new  Rocket Docket procedures that have now been implemented.  If there are 300 summary judgment hearings held a week in Pinellas County….well even if every one of them isn’t granted that’s still hundreds of homes reverting back to the lenders when the foreclosure sales start happening 30-90 days from now.

Forget about the abuse of court process, the fraud, the mistakes the faulty titles that this mess of a foreclosure crisis has dumped in our courtrooms….just think about the very real and practical impact of all this faulty inventory flooding the real estate marketplace….

WHAT’S THE POINT OF ALL THIS FAST FOOD FORECLOSURE ANYWAY?

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There are remedies when this happens, but you’ve got to act quickly.  Hopefully you can catch this within ten days after the foreclosure sale.  Even if you don’t remember judgments are void or voidable if there is fraud or mistake in the files…and there is quite a bit of fraud and mistake in most foreclosure files.

Remember to challenge the sale and attack the judgment.  Read the case below, Elliott v. Aurora for an example of the facts that the court will consider….you might consider contacting the Plaintiff’s attorney but good luck getting through to someone and in my experience, you will not get their attention until you have pled out a very good case with compelling facts and good case law.

elliott v. aurora

As more counties adopt their foreclosure mediation programs, I’m concerned there will be more default judgments and sales as the homeowner is distracted by the mediation and does not respond to the lawsuit.  After meeting with those who will be running the mediation program here in Pinellas County, Mediation Managers, Inc., I’m hopeful that this will not be a major problem here in our county.  I’m convinced those running our program will be working hard to prevent errors and mistakes that will lead to false judgments.

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