When It All Falls Down: "Foreclosure King" resigns

[marmar]

from Mother Jones:



It's all unraveling for David J. Stern, the South Florida foreclosure attorney who built a once-formidable foreclosure empire only to see it crumble in recent months. On Friday, DJSP Enterprises, Stern's publicly traded foreclosure processing company, announced his resignation as president and CEO. Replacing him is Stephen Bernstein, a prominent real estate executive in Florida. It's Bernstein's job now to turn around a company that's lost 96 percent of its initial market capitalization of $300 million in less than a year. The company has never recovered from an unexpected dip in business that caused DJSP's stock to plummet this spring. DJSP's stock value has hovered around $.50 a share for the past week.

The downfall of DJSP, which handles non-legal processing work for Stern's law firm, stems largely from David Stern's own fallout with some of his biggest clients, both in Washington and on Wall Street. After media reports, including MoJo's own eight-month investigation exposed the questionable, dubious practices at Stern's firm (one former employee called it a "legal sweatshop") and widespread evidence of rampant corner cutting and even alleged fraud, the scrutiny of Stern's multimillion-dollar operation increased. Soon after MoJo published its story on Stern in August, the Florida attorney general announced a probe into Stern's firm to see whether bogus paperwork had been cooked up to speed up the foreclosure proceed and churn out more profit.

Before long, facing pressure from members of Congress and the public, Fannie Mae and Freddie Mac, the taxpayer-rescued government housing corporations who'd previously counted Stern among their retained attorneys, stopped doing business with him. It was a major blow to Stern; so important (and lucrative) to him were Fannie and Freddie that he referred to them as his "babies." Citigroup, GMAC, and Wells Fargo followed Fannie and Freddie's lead soon after. As a result, Stern's new business plummeted by more than 90 percent, he wrote to employees in a November letter. His operation has laid off more than 400 of its 1000-plus employees in recent weeks as a result of the slowdown in foreclosure referrals, and is expected to fire even more. .......(more)

The complete piece is at: http://motherjones.com/mojo/2010/11/david-stern-resign-foreclosure-florida

[laughingliberal]

1. Good! nt

[flvegan]

2. The bad news: over 700 folks have lost their jobs.

I don't like Stern, I don't like his law firm, and I don't like how he "practiced" law. I do feel bad that a lot of relatively innocent folks are now unemployed in an already desperate state.

[dkf]

7. They were either unqualified or knew they were breaking the law.

Those types of jobs aren't the ones we want to perpetuate.

[dixiegrrrrl]

3. Now we need to find and publicize the REST of the "robo-signing" firms!

btw:

Last Trade for that firm: .4703 Down 7.78%
Getting a new boss to "turn around" an exposed foreclosure mill may not be the answer.

[sabrina 1]

4. It couldn't have happened to a nicer guy, I hope he's the first of many

greedy bastards who ran these law mills and drove so many people out of their homes, and I hope he loses every dollar he ever made doing so.

At least the courts are getting some justice for those who have been wrongfully foreclosed on, the government sure doesn't care about them.

There is another one of those lawyers who ran a similar operation in NY called Stephen Baum, responsible for the foreclosure of my friend's home, now being sued under the RICO law in a huge class action suit. We knew something was wrong with that foreclosure, but could never get anyone to respond to letters, to phone calls, even to the lawyer she finally hired. I was very glad to read that he too will probably be out of business.

I wish the DOJ would get involved, many of these people are crooks and never should have been allowed to do the harm they have done to people.

And Geithner, when questioned about all this, the refusal of these Banks and their law mills to even discuss mortgage reductions, and to use the money allocated to keep people in their homes, had no answer but tried in his slimey way to prevaricate, fooling no one.

Good to see at least one cog in that corrupt wheel pay for what they did. They all work for Big Banks, like Wells Fargo who also need to be held accountable.

[dickthegrouch]

5. May he be forced to disgorge all of his ill gotten gains

I hope that substantial damages are awarded to every single person his business wrongly foreclosed upon.

[dkf]

6. Too bad this isn't China.

This guy deserve no mercy.