Matt Weidner – Fighting For The American People

Posts Tagged ‘DJSP’

WITHOUT WAITING FOR THE END, MY BIG QUESTION IS WHAT DOES THIS MEAN FOR THE HUNDREDS OF THOUSANDS OF CONSUMERS THAT WERE VICTIMIZED BY ALL OF THIS?

Just today a massive lawsuit was filed in Broward County that has extraordinarily significant national implications.  Now, first things, first.  Allegations in lawsuits are not facts…not until a finder of fact confirms that the allegations alleged are true.  But having said that, many of the base factual statements in this lawsuit regarding the underlying transaction wherein a lawyer in Florida sold the essential parts of an operation whose purpose was to throw Floridians out into the street are facts that are already part of many filings with the Securities and Exchange Commission.  For more about those statements, read what I wrote more than a year ago about it here.

So I read the prospectus a long, long time ago and realized this was bad, bad news.  I screamed loud and hard about it.  But no one listened.  I read the prospectus over and over and it just blew my mind….I recognized that this was not going to end well for my profession or for the court system that I took an oath to defend and protect.

Now, I could care less about investors….my interest was then and is now, the protection of Floridians who were victims of this operation and importantly, I was terribly concerned about the long-term implications for this state’s court system and the dramatically negative impact this transaction was going to have on the profession of law.  The public already held lawyers in low regard and this entire operation was set up to give my profession a much bigger black eye than it already had.

I screamed and argued in my cases, and to the credit of a great many good judges…most of them here in the Tampa Bay area, they caught on real quickly….they listened…and my clients were protected.  But too many other people would not listen.  Who was I after all….just some street fighting consumer lawyer that had developed a passion for sticking up for the little guy.  And since then, “our” court system has been choked by the chaos I warned about so long ago.

But enough about then and what should have been.  Read carefully the allegations that are being made from the insiders in the transaction where a lawyer essentially sold a law office to a group of investors.  But before you do, remember:

1) This lawyer had been the target of a major class action lawsuit filed in Federal Court in 1999.

2) Fannie Mae and Freddie Mac are taxpayer dependent organizations.

3) Fannie Mae and Fredie Mac were aware of the problems with David J. Stern.

4) Fannie/Freddie are misleading the public about how much their malfeasance will cost.

5) Every man, woman and child in the entire USA will pay dearly for Fannie and Freddie’s malfeasance.

So this is all very much every one of our business….after all, we’re all going to be paying for it for our entire lifetimes.  And this is not just a Florida problem….every single taxpayer in America will be paying for this so you’re bought into this problem.  So the questions we all need to be asking as taxpayers, as voters, as the people who are picking up the tab for all of this are….who knew about all of these allegations and how long did they know about them?

And now for the allegations, taken directly from the complaint:

The instant action arises from fraudulent misrepresentations and omissions made by Defendants, Stern, DSI, PTA andDS Law (the “Seller Defendants”) to induce DJSP to purchase the non-legal mortgage foreclosure processing and support serviceoperations of DS Law

After the real estate market crashed in 2008, the Seller Defendants’ law business boomed with DS Law’s mortgageforeclosure caseload rising from 15,000 in 2006 to 70,400 in 2009. In 2009, DS Law handled approximately 20% of all repossessionsin the State of Florida. The Seller Defendants’ largest clients included Fannie Mae, Freddie Mac, Citibank, Bank of America, GoldmanSachs, GMAC and Wells Fargo. Indeed, the Seller Defendants’ clients included all of the top 10, and 17 of the top 20, mortgageservicers in the U.S

The associated Target Business also enjoyed exponential growth as a result of the real estate market crash, and, in2009, the Target Business reportedly brought in a purported $260 million in revenues. However, as more fully explained below, theSeller Defendants fraudulently and artificially inflated the revenues of the Target Business and concealed material information regardingthe unlawful foreclosure practices of DS Law to induce DJSP and DAL into purchasing the Target Business

The Seller Defendants fraudulently induced Plaintiffs DAL and DJSP into entering into the Transaction by fraudulentlyand artificially inflating the Target Business’ actual revenues, by intentionally failing to disclose that the Target Business and DS Lawwere not, in fact, operating in accordance with all applicable laws, and by concealing that DS Law was in jeopardy of losing its largestclients due to DS Law’s unlawful conduct. Indeed, before entering into the Transaction, the Seller Defendants knew that DS Law and theTarget Business had been systematically falsifying and/or back-dating pertinent legal documents, submitting such documents to thecourts, routinely misplacing and losing original key documents, filing foreclosures with inaccurate and/or incomplete documents,prosecuting foreclosure cases without obtaining proper service of process, and were in jeopardy of losing the Seller Defendants’ largestforeclosure clients due to such conduct.

By cutting corners in the foreclosure process without following the rule of law, the Defendants artificially reduced theexpenses of the Target Business which falsely inflated the profitability of the Target Business.

To summarize, the Seller Defendants failed to disclose to DJSP and DAL that DS Law and the Target Business weresystematically operating in an unlawful manner. In addition, the Seller Defendants failed to disclose to DJSP and DAL that the TargetBusiness’ reported revenues were not accurate, inflated, and improperly calculated and that the expenses of the business were alsodistorted due to the systematic practices designed to “shorten” the legal process. The Seller Defendants falsely led DAL and DJSP tobelieve that they were acquiring a long-term profitable business that operated in accordance with all applicable laws to induce DAL andDJSP to enter into the Transaction.

4ClosureFraud posted an entry which cheered Florida’s AG Pam Bondi for finally taking some action on the fraudclosure front.  Two newspapers picked up the story and I did a post on it.  We all thought the Petition meant something…but it doesn’t. The law is well settled…and it’s very, very bad law…..lawyers and law firms are immune from prosecution for unfair and deceptive practices.  Asking the question posed to the Supreme Court at best is going to receive a very swift, “Lawyers Are Exempt” response.  A response such as this is going to be very much like a hot poker shoved in the eye of the citizens who are suffering as part of this mess.

Now maybe the Supreme Court will take the position of Captain Obvious and tell the Attorney General…you’ve got a whole lotta other targets you could be going after.  Like LPS…they’ve been in the news lately or David J. Stern Enterprises, they have not been in the news lately but should be.  DJSP was a bad deal from the outset, and the evidence is laying all around.  It’s in federal court cases. It’s in documents filed with the Securities and Exchange Commission. It’s in depositions filed right there with the Florida Attorney General’s Office.

And so now that I’ve had a day to think about Bondi’s Motion, I feel suckered.  The Motion itself lacks any substance and is not supported by the case law and examples that are necessary to make it a compelling legal document.  I’m afraid it’s going to elicit a wet towel response from the Supreme Court and that’s only going to make citizens even angrier with lawyers than they already are.  I don’t want that. I want lawyers and courts and my profession screaming, “DAMN THE TORPEDOES, WE’RE GONNA SOLVE THIS!” In the midst of this crisis I want to general public to see lawyers as the defenders of their rights and the defenders of the Rule of Law, stepping into the mess that the banksters created and shoving some justice and integrity down their monstorous throats….

That’s what Florida’s lawyers should be doing….not filing tepid motions that will lead nowhere.

Oh what irony, Oh what deliciously sweet irony…..You simply must read the attached report from Bloomberg…

Bloomberg Article Here

The Wall Street Journal today estimated that it will cost $685 billion to overhaul Fannie Mae and Freddie Mac.  The reality is no one has any idea how much it will cost to try and bring some stability to the US mortgage and housing markets because all the talking heads and “leaders” refuse to acknowledge just how deep and pervasive the problems are.

Lets just think about the Law Offices of David J. Stern for a moment.  The putrid mess of concocted and fabricated documents that have been spewing out of this office for years have now so thoroughly polluted record title ownership in Florida that it might literally be impossible to clear the titles that emanated from this firm.  What shall we do with all the foreclosure judgments and titles that are now of record in counties all across Florida?  What should homeowners do who are currently being foreclosed on by the once mighty DJSP? The mess that is DJSP is a mess that was a creation of Fannie and Freddie and it occurred under their watch and supervision.

From a big picture perspective, it is totally irrelevant if a homeowner did not defend or file a pleading in a foreclosure case in which fraud was committed.  Our courts have a duty under the United States Constitution to prevent the kind of systemic abuses that have occurred from occurring and our courts have utterly failed in this regard.  The weaknesses and vulnerabilities of our court system were systematically exploited and violated for years, not just by this firm but others.  But then what does it matter, I mean these people aren’t paying their mortgage right?  Oh yeah, the problems that have been exposed are going to wreak havoc upon the broader United States economy.

I cannot imagine that this tiny little problem called David J. Stern has been factored into any of the wild estimates floating around and they certainly haven’t factored in the civil unrest that should come when more and more consumers realize they’ve been abused by the monster that was the Law Offices of David J. Stern.  But then none of this big picture stuff matters because the homeowner has not paid his mortgage right?

Wall Street Journal

According to a news release, David J. Stern has been replaced!  OH NO!  How can the company that bears one’s name function without the man behind the name?  Whoever will be in charge of performing the “non legal functions” of the enterprise?  What can this mean?

On the conference call just a few short weeks ago, Stern reassured investors that all was fine in China Town. (Nothing to see here folks, just move right along.)  Why I even heard him reassure investors that they had only discovered “problems” with 21 assignments of mortgage. (Or something to that affect.)  If I were an investor in DJSP and I based my decisions solely on the statements made in that conference call, I’d think everything was just fine.  Now did these depositions and AG investigations just materialize overnight after that conference call?  Did no one making those statements on that conference call have any knowledge of the severity of the Category 5 Hurricane of investigations and allegations swirling around?

Press Release

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.