Florida Foreclosure Mill King David Stern Shows Crime Sure Did Pay

[Joanne98]

The Associated Press has a juicy story on the rise and fall of Florida’s foreclosure mill kingpin David Stern (hat tip Lisa Epstein). It combines sordid detail with an account of how his business as a business went wildly off the rails.

For those new to this blog, the Law Offices of David Stern was the biggest foreclosure mill in Florida, one of the first to be targeted by a state attorney general, and per both reports on the ground as well as revelations from official and media investigations, one of the worst abusers of court procedures and borrower rights.

Aside from depicting how utterly out of control Stern was as a businessman, the AP story helps explain how the mortgage business got to be such a horrorshow. Moe Tkacik, a financial writer who has poked around the dark corners of the securitization and muni finance businesses, and I chatted a couple of nights ago about the foreclosure crisis. One of the questions that was nagging at her was who came up with the idea of robosigning?

The article suggests that it was the foreclosure mills in response to servicer pressure on fees. And notice the stance of the writer in this extract. Most MSM accounts so far have bent over backwards not to be too critical of banks. By contrast, this article depicts servicers as partners with Stern in what Bill Black would call a criminogenic environment (boldface ours):

The rise and fall of Stern, now 50, provides an inside look at how the foreclosure industry worked in the last decade — and how it fell apart. It also shows how banks, together with their law firms, built a quick-and-dirty foreclosure machine that was designed to take as many houses as fast as possible…

http://www.nakedcapitalism.com/2011/02/florida-foreclosure-mill-king-david-stern-shows-crime-sure-did-pay.html