Matt Weidner – Fighting With The American People

Posts Tagged ‘DJSP’

Sometimes the screams of attorneys and activists who are protesting the conduct of the foreclosure mills seems like voices screaming in the wilderness.  Having said that, the following press release from the Florida Attorney General’s office gives me some hope that raising all these alarms is not totally in vain.

TALLAHASSEE, FL – Attorney General Bill McCollum today announced his office has launched three new investigations into allegations of unfair and deceptive actions by Florida law firms handling foreclosure cases. The Attorney General’s Economic Crimes Division is investigating whether improper documentation may have been created and filed with Florida courts to speed up foreclosure processes, potentially without the knowledge or consent of the homeowners involved.

The new investigations name The Law Offices of Marshall C. Watson, P.A.; Shapiro & Fishman, LLP; and the Law Offices of David J. Stern, P.A. The law firms were hired by loan servicers to begin foreclosure proceedings when consumers were in arrears on their mortgages.

Because many mortgages have been bought and sold by different institutions multiple times, key paperwork involved in the process to obtain foreclosure judgments is often missing. On numerous occasions, allegedly fabricated documents have been presented to the courts in foreclosure actions to obtain final judgments against homeowners. Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation.

The Attorney General’s Office is also investigating whether the law firms have created affiliated companies outside the United States where the allegedly false documents are being prepared and then submitted to the law firms for use.

Subpoenas have been served on each of the law firms listed above, and the investigations are ongoing.

Click here to see the Mother Jones story and read the subpoenas.

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.

One of the most frustrating things I find in the current foreclosure crisis is watching the big foreclosure mills just trample of the rights of real people and just ignore case law, rules of evidence and rules of the Florida Supreme Court.  I just cannot understand how they have been permitted to get away with it on such a massive scale.  I mean, what if lawyers just announced they would be ignoring rules of civil procedure….oh wait, that’s exactly what DJSP did with the following disclaimer in the SEC Prospectus:

The Supreme Court of Florida has recently taken an active role in ensuring that proper documentation is filed in a
foreclosure action by amending several rules of civil procedure and pertinent forms related to foreclosure actions filed in Florida….
However, DJS may not be successful in complying with these new rules.

Next, read carefully the attached Motion for Rehearing.  In it, Stern’s office attempts to justify ignoring the valid rules of the Florida Supreme Court.  The Supreme Court provided their response to this argument when it released the following response:

The motion for rehearing on in the alternative is hereby stricken as untimely.

(Apparently the words “shall become effective immediately upon release of this opinion” didn’t make it clear enough)

Now, when no less an authority than the Supreme Court issues an Order interpreting issues relating to their own validly-enacted rules, you would think that would be the end of it right?  Well, apparently that’s not the case.  Stern’s office makes a strained argument that somehow the Rule is not effective.  Forget about the fact that Strern’s office didn’t even file any request for rehearing or clarification….if they took issue with the new Rule, why didn’t they file a response or request for rehearing?  They did not.  So what should be the sanction if Stern and other mills have taken a gamble on a creative interpretation of court rules or procedure and that gamble is not correct?

I am of the opinion that entire circuits should adopt programs like the one adopted by the Twelfth Circuit where the court reviews complaints and dismisses them on its own motion if they are not in compliance with the rule.  I frankly cannot understand why taxpayer dollars should be used to subsidize knowingly improper conduct by the Millionaire Foreclosure Mills or why this conduct goes on with no sanction.

Our judges are under incredible political pressures to clear their foreclosure dockets and dismissing cases when the millionaire foreclosure mills knowingly violate the rules and waste judicial resources is an appropriate sanction that could generate millions of desperately needed revenue for our courts and their overworked staff.  I have yet to have Stern’s office set one of my Motions to Dismiss on this issue for hearing, but I promise I’ll be loaded for bear and I will have a court reporter present if they ever develop enough confidence in their argument to set it for hearing.

Well, enough of my editorializing, read the work below, tear it apart and please share your comments and insight.  I hope that by sharing this Motion and argument we’ll all be better prepared to oppose these positions.

David Stern- Motion for Rehearing

David Stern- Memo in Support of Motion to Dismiss

David Stern- Opposition to Motion To Dismiss

David Stern- Motion to Dismiss Non Verified

Finally, on a related topic, read a recent Palm Beach Post Article on Fraudulent Assignments of Mortgage it provides an interesting counter point to the detailed and researched reporting that appeared in today’s Mother Jones news.  We’re all in this fight together people.  Remember, they’re our courtrooms…..not theirs!

Congratulations to Ice Legal for really being on the front lines of the fight to ensure basic rights and the rules of the courts are respected and thanks to Mike Dillon for the early morning heads up on the story.

Now the national media is picking up on what all of us have known for far too long…..the rich foreclosure barons are shoveling in millions of dollars and abusing courts and homeowners in the process.

One of my questions is how courts can continue to sanction the conduct reported in this article?  How can our federally-backed lenders and servicers continue to sanction such conduct?  It’s a terrifying commentary on what our country has become when the conduct reported in this article has become so institutionalized that it’s widely accepted.  We should all be reminded that this fight we’re in is a fight for the very heart and soul of this country and our courts.  There are judges that “get it”.  (Note that one of Pinellas County’s great judges Hon. Anthony Rondolino is quoted prominently in the article.)  There is a small but growing band of activists that are sounding the alarm bells.

Let’s just hope this evil fire gets extinguished before we reach a point of catastrophic no return….if we have not already.

Read on.  Visit the Mother Jones website for the full story.

— Illustration: Lou Beach

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.

Advertise on MotherJones.com

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.”

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.”

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.)

For the rest of the article, click here.

The picture above is another million dollar example of foreclosure slop. The home, located at 101 21st Avenue North in St. Petersburg Florida was once a proud and beautiful example of residential beauty.  It sits on three large lots in one of the nicest areas of town.  Just a few short years ago, it’s lush tropical landscape and interesting gardens made it the jewel of the street.  Today it’s a vacant and crumbling eyesore, a blight on the neighborhood.  The foreclosure mills have made such a mess out of the foreclosure, that the home will have to be re-foreclosed before it can ever be sold. But it’s such a mess that I predict it will just fall into continued disrepair and be liquidated for next to nothing.  Here’s the anatomy of this foreclosure mess:

Have a look at the property appraiser card for this property, gorrellpropertyappraiser

12/26/2007, David Stern Enterprises, (DJSP) on behalf of Citimortgage, filed a foreclosure. gorrellcitilis

1/18/2008, Shapiro and Fishman, on behalf of HSBC file a second foreclosure on the same property. gorrellhsbclis

2/01/2008, HSBC files affidavit swearing they cannot get personal service on the defendants.

3/13/2008, Scott Anderson/MERS executes assignment of mortgage from Delta to HSBC. gorrellassign

9/11/2008, Court enters Order of Dismissal, dismissing the HSBC foreclosure. gorrellmasterdismissal

9/11/2008, Court enters Order of Dismissal, dismissing the Citi foreclosure. gorrellmasterdismissalciti

4/16/2010, Court enters Final Judgment of Foreclosure to HSBC for $1 million. gorrelljudgment

4/24/2009, Citi files a Voluntary Dismissal. gorrelldocket

6/24/2010, Court issues Certificate of Title to HSBC Bank. gorrellCT

To the untrained eye, all those documents and the chain of slop and mistakes may not mean much, but the title work on this property will give any experienced title attorney nightmares.  It’s just a mess on top of a mess, topped off with an unresolvable mess.  It’s hard to tell what’s the worst thing about all this.  Is it the fact that the judgment is void or voidable as to the Defendants Gorrell due to the improper service?  The post-filing assignment of mortgage?  The questionable veracity of the HSBC Assignment?  HSBC ignoring the Citi Lis Pendens?  The code enforcement liens?

I’m going to keep watching this property to see what becomes of it.  HSBC claims they’ve paid $35,000 in property taxes on the home and $19,000 in homeowner’s insurance.  The taxes work out to $11,000 per year, so HSBC will keep eating those taxes for years to come.

The irony of the whole thing is I alerted the foreclosure mill attorney to the problems with this file more than a year ago….it would have been easy enough to resolve some of the problems if anyone cared enough to put the time into the file, but you know….in this rush to push these cases through….who has the time to do things correctly…..there’s another even more messed up foreclosure that I’ll share with everyone later….

Things just keep looking darker for the former king of Florida foreclosures, David J. Stern.  This comes from the wire at Wall Street Journal…poor David J. Stern…..the following is taken directly from the press release:

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?