Florida's Foreclosure King Investigated For Questionable Practices

VIDEO:The Mortgage Bullies
Share
Copy

A former paralegal with Florida's largest foreclosure law practice has told state investigators that the firm routinely signed court paperwork without reading it, misdated records, forged signatures and passed around notary stamps in the rush to foreclose on homes.

"This is just the beginning really," the paralegal, Tammie Lou Kapusta, told ABCNews.com. "It's the tip of an extreme iceberg."

The allegations are the latest leveled against the firm of multimillionaire attorney David J. Stern, who has amassed a fortune foreclosing on the homes of struggling families on behalf of lenders.

The 50-year-old Stern even considered naming his $20-million yacht "Su Casa Es Mi Casa – "Your House is My House," an acquaintance told the New York Times. After his wife and others reportedly cautioned against it, Stern settled on Misunderstood. He denied to the newspaper that he considered "Su Casa Es Mi Casa."

VIDEO: Housing Market Debacle
The Housing Mess

"From David Stern's perspective, he's a lawyer given defaulted mortgages to foreclose in a court proceeding," said his lawyer, Jeffrey Tew. "So it's really wrong to vilify him. Let's put it this way, there is a well-organized defense bar who is making a lot of money keeping people in their homes."

But it's the booming mortgage-servicing industry that is under legal scrutiny. Some 40 state attorneys general are expected to announce this week a joint investigation into the industry in hopes of pressuring financial institutions to rewrite a sea of troubled loans.

Across the nation, mortgage-servicers, which include units of major banks such as Bank of America Corp., have been accused of submitting fraudulent documents in thousands of foreclosure proceedings.

In Florida, Stern is foreclosure king, operating the large law firm plus a foreclosure processing company and other support businesses that he recently sold off.

His Plantation, Fla., firm, which filed 70,382 foreclosure cases last year, is the largest of three under investigation by state Attorney General Bill McCollum for allegedly filing improper documents with courts to hasten the overloaded foreclosure process.

Foreclosure Industry Poster Boy

To detractors, the 50-year-old Stern has become emblematic of the foreclosure crisis, the architect of what they call a giant assembly line that has undermined struggling homeowners at a time of record foreclosures. Nationwide, there were 2.8 million foreclosures in 2009. Florida leads the nation in foreclosures with more than 400,000 filings this year alone.

"He is notorious in Florida and, in the rest of the country, we pay some attention to Florida because the worst behavior often emanates from there," said Linda Fisher, a professor and mortgage-fraud expert at Seton Hall University's law school. She said she had no direct knowledge of the Stern's practices. "I've heard some pretty bad stories about Stern for at least the last couple of years or so."

To defenders, Stern is a hard worker who has legally reaped enormous profits representing banks and financial services in actions against tens of thousands of delinquent borrowers.

"It's really unfair to make the foreclosure lawyer ... somehow a villain," Tew said. "With the increase in volume, there's no question that David firm's revenues have grown dramatically but there's nothing wrong with that. He's not gouging."

Tew said Stern's firm makes about $1,400 per foreclosure, totaling about $98 million last year.

Page
  • 1
  • |
  • 2
  • |
  • 3
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...