Posts Tagged ‘DJSP Enterprises’
BOMBSHELL- BONDI’S PETITION TO THE FLORIDA SUPREME COURT! GO PAM! GO!
Author: Matthew D. Weidner, Esq.
WOW FOLKS! This is big…hat tip to Lisa Epstein for picking up on the Florida AGs Motion to the Florida Supreme Court and even more for spotting the HUGE issues that are identified in this motion.
The thing that is so staggering about the question certified in the motion is the question itself….the questions Bondi asks of the Florida Supreme Court are nearly the same questions asked by the Fourth District Court of Appeal….
Should banksters get away with ignoring the law just so they can speed foreclosures through and evict people improperly?
What should courts or this Attorney General do when confronted with a widespread and systemic crime spree that impacts millions of Floridians and is decimating the economy of the entire state?
Florida’s Attorney General deserves credit for now asking the questions. As hard as I’ve criticized for the inaction thus far, I will be the loudest champion and supporter when this AG gets behind efforts like the AGs in Nevada, California, New York.
The glaring problem with this petition and the entire approach is it is well settled law that law firms are exempt from consumer protection laws…everyone knows this absurd fact…and it needs to be changed…the problem, as this fact is applied to the action being taken by the Attorney General is that this approach risks a whimper of a response from the Supreme Court…..as it stands, the petition does look like a publicity stunt….a way to state publicly that the AG tried to do something but darn it, the Supreme Court punted.
All the AG needs to do is expand the inquiry into the document mills hired by the banks and into the banks and the servicers themselves…oh, and this should specifically be expanded to include the so-called back end operations of the Law Firm of David J. Stern, DJSP Enterprises….perhaps someone could make that suggestion…so that it makes its way up the food chain for the Supreme Court to consider…..
READ THE PETITION HERE:
David J. Stern- The Man Behind The Crumbling Foreclosure Empire
Author: Matthew D. Weidner, Esq.
From the Sun Sentinel:
Attorney David J. Stern has spent much of the past year in the spotlight, as reports of legal troubles plaguing Florida’s home foreclosure system continue to emerge.
Stern’s Plantation-based foreclosure practice is one of eight under investigation by the Florida attorney general for allegations of fabricating documents, slipshod paperwork and questionable fees.
The mortgage lenders who once loved him have severed their business ties with him. DJSP Enterprises, a company he created to handle nonlegal foreclosure work, has been sued by former employees who claim the company violated layoff notification laws as it slashed its staff to about 50. Last week, Stern announced that he will cease the law firm’s home repossession operations March 31.
Front Page of St. Petersburg Times- My Thoughts On The Foreclosure Crisis.
Author: MattWeidner
What Will It Take To Stop This Madness? Local Television on Foreclosure Fraud.
Author: MattWeidner
National, regional and local press are reporting the serious issues relating to Foreclosure Fraud nearly every day now. A handful of honest judge with integrity are taking notice of the fraud in the foreclosure process and holding the lawyers and their clients to task. A ranking member of the United States Congress has written a letter to the Chief Justice asking for a moratorium on foreclosures. And yet in spite of all of this, across this state, oftentimes in secret courtrooms that are hidden from the public using evidence and information that is hidden from the scrutiny of press or public view, judges will be signing thousands of foreclosure judgments.
I was in one of those secret Kafka-esque courtrooms in Tampa yesterday. I made the speech I just made to the judge as he was in the middle of robo signing hundreds of judgments. He seemed annoyed at my presence in the courtroom and my suggestion that there was anything at all wrong with the process. We all know this is horribly wrong and like a sick patient that ignores his symptoms before it’s too late, the longer we allow this to play out, the worse the day of reckoning will be. One of my motivations early on was to bring attention to this crisis in the hopes that officials would step up and stop this madness. Our Attorney General is to be commended for taking the lead in this crisis…we can only hope that the Office of Attorney General maintains the integrity necessary to give these investigations their full force and impact.
David J. Stern Enterprises Announces Earnings…..
Author: Matthew D. Weidner, Esq.
Profits at this state’s most notorious foreclosure mill were announced yesterday. The thing that I still cannot understand is why our local, elected circuit court judges allow so much shotty practice of law to occur from this mill and others, while the mills are allowed to announce million dollar profits…oh and another question about how what is essentially a law practice can be permitted to be publicly traded. The whole problem with this is the rules and ethical obligations of lawyers are inconsistent with a publicly traded company.
When will all this stop? Make sure to tune into the earnings conference call at 8:30 (Perhaps every judge in the state should tune in for this call.)
Management will conduct a conference call at 8:30 a.m. Eastern Time on Wednesday, September 8, 2010, to discuss the second quarter and year-to-date 2010 results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-312-5504. When prompted by the operator, mention conference ID 94593027.
PLANTATION, Fla., Sept. 7, 2010 (GLOBE NEWSWIRE) — DJSP Enterprises, Inc. (Nasdaq:DJSP – News) (Nasdaq:DJSPW – News) (Nasdaq:DJSPU – News), one of the largest providers of processing services for the mortgage and real estate industries in the United States, today announced financial results for the three and six month periods ended June 30, 2010.
Second Quarter Financial Highlights
- Total revenue for the second quarter 2010 decreased 9.1% to $56.1 million from $61.7 million in last year’s comparable period.
- Excluding client costs, total revenue for the second quarter 2010 decreased to $28.9 million from $30.9 million or 6.5% compared to the same period last year.
- Adjusted Net Income including noncontrolling interests was $5.5 million for the second quarter 2010 or $0.28 per diluted share.*
- Adjusted EBITDA for the second quarter 2010 was $6.7 million.
Year to Date Financial Highlights
- Total revenue for the six months ended June 30, 2010 increased 9.3% to $127.7 million from $116.8 million in last year’s comparable period.
- Excluding client costs, total revenue for the six months ended June 30, 2010 decreased to $59.7 million from $61.0 million or 2.1% compared to the same period last year.
- Adjusted Net Income including noncontrolling interests was $14.2 million for the six months ended June 30, 2010 or $0.73 per diluted share.*
- Adjusted EBITDA for the six months ended June 30, 2010 was $21.1 million.
*Calculated using treasury stock method assuming an average ordinary share price of $8.25 for the quarter ended June 30, 2010; assuming 19.5 million average diluted shares outstanding.
Second Quarter Results
Total revenue for second quarter 2010 decreased 9.1% to $56.1 million from $61.7 million in the same period last year. This was primarily due to a decrease in foreclosure referrals, title fees, and client reimbursed costs. Title fees decreased due to the decrease in foreclosure volume and the switch made by some clients to use their own title company. These decreases in revenue were partially offset by increases in REO closings, REO liquidation operations at Default Servicing, and eviction fees. Two new service offerings, Deed-in-lieu and Mediations, also contributed to offsetting these decreases. During the second quarter, client reimbursed costs decreased by 11.7% to $27.2 million from $30.8 million in the same quarter in 2009 as a result of a decrease in foreclosure volume. Our REO closing business became an increasingly significant source of revenue during the quarter, generating $3.5 million in revenue compared to $2.1 million in the same period last year. Our REO liquidation business, which emanates from a single customer, contributed $3.2 million in revenue in the second quarter compared to $2.9 million in the same quarter last year. Going forward, we intend to offer both REO closing and liquidation services to additional customers as a means of increasing revenues and profits. Deed-in-lieu and Mediation services were initiated in the second quarter and contributed a combined $0.7 million to our revenues during the quarter. Revenue from foreclosure services decreased by $1.5 million, or 8.3%, for the quarter to $16.6 million, compared to $18.1 million during the same period last year.
Our adjusted EBITDA decreased to $6.7 million for the three months ended June 30, 2010 from $17.7 million in the same period last year. This decrease was primarily due to three factors: the decrease in foreclosure volume; an increase in compensation expenses; and an increase in expenses related to becoming a public company, including $0.9 million in legal expenses. Our compensation expenses increased $2.6 million, on an adjusted basis, primarily as a result of staffing increases. Increases in staffing were made to address expressed client needs, expanding legacy files due to court delays, and necessary upgrades to the corporate management structure. A much smaller increment of the increase in staffing was due to the mandatory mediation requirement dictated by the Florida Supreme Court for foreclosure files.
During the second quarter 2010, our adjusted net income decreased to $3.5 million from $8.3 million in for the same period in 2009, due to the decrease in revenue and increase in our expenses stated above.
Year-to-Date Results
Total revenue for the six months ended June 30, 2010 increased $10.9 million, or 9.3%, to $127.7 million from $116.8 million in last year’s comparable period. The revenue resulted from an increase in client reimbursed costs, REO closings, REO liquidations, eviction services, and two new services, Deed-in-lieu and Mediation. These increases were offset by decreases in our foreclosure and title services fees. Excluding client reimbursed costs, our total revenues decreased by $1.3 million, or 2.1%, to $59.7 million compared to $61.0 million for the same period last year. Revenues from our REO closing and liquidation business increased by $2.4 million and $1.6 million, respectively, over the same period last year. As mentioned above we initiated two new services, Deed-in-lieu and Mediations, which contributed a combined $0.7 million to total revenue.
Compensation expenses, on an adjusted basis, increased by $5.9 million, or 30.7%, to $25.1 million for the six months in 2010 compared to $19.2 million during the same period in 2009.
General and administrative expenses, on an adjusted basis, increased by $5.1 million, or 60.7%, to $13.5 million from $8.4 million last year. Public company and nonrecurring expenses increased our expenses by approximately $2.5 million during the first six months of 2010. Other operating expenses, including rent, supplies, travel, mailing, and others, increased as a result of the increase in headcount.
During the first six months of 2010, our adjusted net income decreased to $7.8 million from $15.8 million in the same period in 2009.
We generated $17.1 million in cash from operating activities in the six months ended June 30, 2010, compared to $26.4 million in the six months ended June 30, 2009.
Our overall debt of $74.6 million bears an average interest rate of 2.9%. The senior note of $35 million bears no interest for the first six months.
Operating Discussion
As a result of management’s discussions with our largest client, The Law Offices of David J. Stern, P.A. (“DJSPA“) and with the major lenders and servicers for whom DJSPA processes foreclosure files, we believed file volume would increase in the third quarter and we previously decided to maintain current staffing levels. However, file volumes continue to be delayed and existing staffing levels are not sustainable indefinitely.
Rick Powers, President and COO commented, “While a large portion of our business can only be processed with human capital, we are identifying opportunities where technology and process change can be implemented to create efficiency. We are prepared to create efficiencies and make cuts where appropriate over the next three to six months.”
DJSP Enterprises continues to diversify our service offerings beyond default services. As part of our effort to grow our business, we are building business to address the new government initiatives. In this regard, we have expanded our national Deed-in-lieu and modification services. Our Deed-in-lieu business has been our fastest growing service offering in the third quarter. In addition, with the addition of Timios we are moving to expand our title services, which among other things, provides title work for refinancing, into the nation’s largest and hardest hit real estate market of California.
Timios, Inc.
As of August 1st, all Florida title operations have been consolidated under the common management of Timios, Inc. and have already adopted Timios’ best in class paperless operating system for all new orders. In addition we are in the process of licensing Timios in California, the nation’s largest real estate market. This is a major step in becoming a cyclical provider of services to the mortgage industry.
Rick Power added, “That we were able to accomplish this consolidation in such a short period of time speaks to the strong technology at Timios and the quality of both management teams. We are looking forward to entering the California market and expect continued strong performance from Timios.”
Management
David J. Stern Chairman and CEO stated, “We are happy to announce that Kerry Propper will be taking Matthew Kayton’s seat on the board of directors. Mr. Kayton will transition roles with the company and will continue to work with us on a consulting basis in the areas of Title services, acquisitions and other strategic initiatives.”
Mr. Stern continued, “I am very thankful to Matthew for his service and I look forward to his continued contribution as a consultant. Kerry brings a great deal of public company experience to the board and I am pleased that he will be joining us.”
Conference call Information:
Management will conduct a conference call at 8:30 a.m. Eastern Time on Wednesday, September 8, 2010, to discuss the second quarter and year-to-date 2010 results. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 877-312-5504. When prompted by the operator, mention conference ID 94593027. Participating in the call for DJSP will be David J. Stern, Chairman and Chief Executive Officer, Rick Powers, President and Chief Operating Officer, and Kumar Gursahaney, Executive Vice President and Chief Financial Officer.
If you are unable to participate in the call at this time, a replay will be available for one week starting on Wednesday, September 8, 2010, at 11:30 Eastern Time. To access the replay, dial 706-645-9291. Please use passcode 94593027. The call will also be carried live by webcast over the Internet and accessible at www.djspenterprises.com.
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 DJSPA, whose clients include all of the top 10 and 17 of the top 20 mortgage servicers in the United States, many of which have been DJSPA clients for more than 10 years. We have approximately 1,200 employees and contractors and 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 efficiencies and expense reduction efforts. Mr. Kayton’s ongoing consulting role with us, our strategic growth initiatives and our ability to provide closing services in California. 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 the 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.
Non-GAAP Financial Measures
The financial information and data contained in this press release are unaudited and do not conform to the SEC’s Regulation S-X. This press release includes certain estimated financial information and forecasts presented that are not derived in accordance with accounting principles generally accepted in the United States (“GAAP”), and which may be deemed to be non-GAAP financial measures within the meaning of Regulation G promulgated by the SEC. Management believes that the presentation of these non-GAAP financial measures serves to enhance the understanding of the Company’s financial performance. Such measures are not recognized terms under GAAP, and should be considered in addition to, and not as substitutes for, or superior to, operating income, cash flows, revenues, or other measures of financial performance prepared in accordance with GAAP. Such measures are not a completely representative measure of either the historical performance or, necessarily, the future potential of the Company.
The adjusted EBITDA measure presented consists of income (loss) from continuing operations before (a) interest expense; (b) income tax expense; (c) depreciation and amortization; and (d) income and/or expense items that are expected to be at different levels in future periods. We are providing adjusted EBITDA, a non-GAAP financial measure, along with GAAP measures, as a measure of profitability because adjusted EBITDA helps us to evaluate and compare our performance on a consistent basis with the operating cost structure in place as a publicly traded operating company, reflecting the effects of that cost structure and our current fee schedule. In the calculation of adjusted EBITDA for the three and six months ended June 30, 2009, we exclude from expenses the compensation paid to Mr. Stern that exceeded the base compensation that he was entitled to receive after we became a publicly traded operating company (and prior to September 1, 2010), because the Company no longer has any arrangement with Mr. Stern that would require any payments to him at a comparable level. Mr. Stern does not have an incentive plan arrangement providing for pay above base compensation. In addition, we excluded the payroll taxes associated with such compensation, as well as travel expenses incurred on behalf of Mr. Stern in prior periods that are no longer provided since we became a publicly traded operating company. The adjustment to Fee to Processing reflects the additional fees DJS Processing, LLC would have received under the Services Agreement if the fee schedule under the Services Agreement had been determined in a fashion consistent with the current fee schedule. In the calculation of adjusted EBITDA for the three and six months ended June 30, 2010, we included additional fees due to DJS Processing, LLC as a result of a retroactive amendment to the fee schedule for the Services Agreement agreed to by DJS Processing, LLC and DJSPA to increase the fees payable to DJS Processing, LLC effective January 1, 2010.
In the calculation of the adjusted net income measure presented for the three and six months ended June 30, 2010, we deducted the actual GAAP interest, depreciation and amortization for the period from the adjusted EBITDA calculation and then subtracted assumed income tax expense, calculated at the expected going forward tax rate of 38.6% on pre-tax income after minority interest. For periods prior to our becoming a publicly traded operating company, we were not subject to income tax and therefore did not record income tax expense. We are providing adjusted net income, a non-GAAP financial measure, along with GAAP measures, as a measure of profitability because adjusted net income helps us to evaluate and compare our past performance on a consistent basis with the taxable structure in place after our becoming a publicly traded operating company, reflecting the effects of that taxable structure on profitability. In the calculation of adjusted net income measure presented for the three and six months ended June 30, 2010, we deducted the actual GAAP interest, depreciation, amortization and income taxes for the period from the adjusted EBITDA calculation. The following table provides reconciliations of net income (GAAP) to Adjusted EBITDA (Non-GAAP) and adjusted net income (Non-GAAP).
THREE BOMBSHELLS~! 1)I Lost a Summary Judgment; 2)Obama Bailout; 3) Fannie/Freddie Issue New Attorney
Author: Matthew D. Weidner, Esq.
1) Today I lost a summary judgment hearing. I’ve got to tell you I’m sickened, not just for the sense of loss I feel, but more importantly for what I view as a real problem in the courtroom. My arguments were well founded and so were the dozens of other attorneys I saw in the courtroom, but we were all just shut down, denied. Summary Judgment Granted. I will post my Motion to Vacate/Reconsideration soon. The experience serves as a reminder to file all your objections (I filed two separate ones) and make sure you have a court reporter present. (I did) Even though I did, I took a straight up gut punch to the belly loss today and it stings….bad.
2) I’ve been saying from the beginning of this crisis that it will take bold and dramatic federal intervention to make a dent in this crisis. Reliable reports from a variety of sources report that a dramatic federal bailout of mortgages may be coming. Click here for that report.
3) Finally, new guidelines were issued by Fannie/Freddie that limit referral fees and relationships among and between the foreclosure mills and the companies providing services to the mills….I can only wonder how these new regulations (and restatement of existing regulations) will affect certain providers of non legal back end services such as oh, I don’t know DJSP Enterprises…(That’s the non-legal component of The Law Offices of David Stern) I can only wonder how this will impact the already tanking stock of DJSP…..click here for the FannieRelease.
And now back to my Motion for Rehearing/Motion to Vacate.
