FLA State probes whether three law firms falsified foreclosure documents

Editor’s Note: The REAL BOTTOM LINE POINT is not some technicality wherein the paperwork wasn’t done right, which frankly is reason enough to deny the foreclosure, it is that this “technical” deficiency is “derived” from the fact that there is no note or mortgage or deed of trust that can be enforced. There might not even be any obligation at all if the creditor received payment in full.

LAWYERS TAKE NOTE: Go back to the law books. There are essential differences between the obligation that arises as a matter of law, the note that is offered as proof of the obligation, and the mortgage or deed of trust which is incident to the note.

Don’t dispute the obligation. It DID arise by operation of law. And by operation of law it may still exist, be partially extinguished or entirely extinguished. The documents signed at closing were only PART of the deal in a securitized residential loan. The borrower signs a note and the lender (investor) gets a bond (or evidence of a bond). [THE NOTE AND BOND HAVE DIFFERENT TERMS AND PARTIES BUT THE BOND REFERS TO SECURITIZATION DOCUMENTS THAT IN TURN DESCRIBE LOANS OF WHICH THE BORROWER’S LOAN IS ONE CLAIMED TO BE IN A POOL FORMING THE SOURCE OF REVENUE].

WITHOUT REAL DOCUMENTS SIGNED BY REAL PEOPLE WITH REAL AUTHORITY WITH REAL EFFECTIVE DATES, THE CHAIN IS BROKEN.

The borrower signs the note to a party whom the investor never heard of nor could the investor have uncovered the payee on the note because the information was withheld. The investor receives a bond which is an assignment of all right, title and interest to the receivables, but the security instrument is left where it always was — with the mortgage originator (the only one in county records with an interest). The lender (investor) doesn’t know the borrower and the borrower doesn’t know the lender, while each of them receives different terms and [promises from different parties.

But by operation of law, the originator’s interest is extinguished the moment it arises because it is in most cases a table funded loan in which the originator acted as a broker not a lender, and performed no underwriting tasks. So the legal obligation is extinguished at the same time that the legal obligation arises.

BUT that is not the end of the story.

The equitable powers of the court come into play to prevent unjust enrichment. So the next time a Judge says he doesn’t want the borrower to get a house for free, your answer should be you don’t want anyone to get the house for free. And if the Court wishes to exercise its equitable powers to allocate any equity in the home, after due consideration for the obligations of the borrowers and many others who promised to pay the bond holder then the party seeking affirmative relief must make a short plain statement of ultimate facts upon which relief could be granted and then prove their case.

What these law firms and fabrication mills are doing is fabricating and forging documents to create the illusion that those complexities don’t exist — a conclusion that every Judge would like to reach.

Ultimately, the die is cast — the Courts are required to consider the complexity and force the real party in interest, the party with standing to say they lost money on the deal and to show exactly how they did lose money — not merely point to the borrower’s non-payment.

The non-payment by borrower ONLY comes into play if the payment is due and the “creditor” can prove their standing and prove the obligation, complete with an accounting from beginning to end. The fact that the note SAYS the payment is due does not make the payment due — not if the payment was made or the obligation has been changed or satisfied.The note is evidence that must be proffered though the rules of evidence with authentication from competent witnesses or admission from the borrower. Don’t be so quick to admit that they have the note. Even if it is right in front of you, close examination may well reveal that it came off a color printer that morning.

The reason the die is cast is that ultimately this comes down to property law. The breaks in the chain of title render every title in whichever a securitized loan was involved susceptible to being identified as unmarketable or defective title. This threatens the entire marketplace. It is this issue that these firms and the large banks are continuing to finesse with their freshly color-printed “original” documents, indorsements, assignments and powers of attorney.

NEWS RELEASE

For Immediate Release

August 10, 2010

Contact: Sandi Copes

Phone: 850.245.0150

Sandi.Copes@myfloridalegal.com

FLORIDA LAW FIRMS SUBPOENAED OVER FORECLOSURE FILING PRACTICES
——————————————————————

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.

For an official, downloadable photograph, please visit http://www.myfloridalegal.com/picture.html. Also, follow the Attorney General’s Office on Twitter! http://www.twitter.com/myfloridalegal

Palm Beach Post Staff Writer
Posted: 11:48 a.m. Tuesday, Aug. 10, 2010
The Florida Attorney General’s office announced this morning investigations into the state’s three largest foreclosure law firms for allegations of unfair and deceptive actions.
The firms, sometimes called “foreclosure mills,” are the Fort Lauderdale Law Offices of Marshall C. Watson, Tampa-based Shapiro & Fishman, and the Law Offices of David J. Stern, based in Plantation.
Last month, a lawsuit seeking class action status was filed by a Fort Lauderdale attorney against Stern claiming the firm generated fraudulent mortgage assignments when pursuing foreclosures.
An assignment is held by the entity that has the right to receive mortgage payments.
Stern’s practice, which the lawsuit claims filed up to 7,000 foreclosure cases in Florida every month last year, also is alleged in the suit to have pursued foreclosures for lenders that didn’t own the debt on the homes.
Miami attorney Jeffrey Tew is representing Stern. Last week, he said Stern and his company have done nothing wrong.
“This foreclosure crisis was not created by David Stern, but it is so huge and a lot of people are in very bad shape, so some of the finger-pointing goes to him,” Tew said.
Tew called portions of the lawsuit that claim Stern conspired to confuse ownership of homes “fantastical.”
A press release from Attorney General Bill McCollum’s office says because many mortgages have been bought and sold by financial 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,” the press release states. “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.”

43 Responses

  1. Mr. Garfield’s commentary in this post is a great summary of the BOTTOM LINE.

    I saw some of the basic black letter law that he is pushing us to remember.

    It’s the important Carpenter V Longan supreme court case from 1872 … ignore for a moment the oft cited mortgage follows the note thing and look at some of the later parts. (Please excuse my poor briefing skills, they don’t cover brief writing in Pro Se law school, hehe)

    http://supreme.justia.com/us/83/271/case.html

    “When the note is paid the mortgage expires. It cannot survive for a moment the debt which the note represents.”

    Then the court cities an earlier case from the 1790s (?)

    In that case, the

    “mortgagee assigned the bond and mortgage fraudulently and thereafter received large sums which should have been credited upon the debt. The assignee sought to enforce the mortgage for the full amount specified in the bond. ”

    (!!! wow its the same fraud as now !!!)

    The judge in that earlier case wrote:

    “The debt therefore is the principal thing, and it is obvious that if an action was brought on the bond in the name of the mortgagee, as it must be, the mortgagor shall pay no more than what is really due upon the bond; if an action of covenant was brought by the covenantee, the account must be settled in that action. In this Court, the condition of the assignee cannot be better than it would be at law in any mode he could take to recover what was due upon the assignment.”

    Then the Supremes get to their their BOTTOM LINE:

    “The principle is distinctly recognized that the measure of liability upon the instrument secured is the measure of the liability chargeable upon the security. The condition of the assignee cannot be better in law than it is in equity.”

  2. Edge… this one’s for you.. sanctions againist Shapiro.

    http://www.usfn.org/Content/NavigationMenu/INDUSTRYRESOURCES/ServicingTopics/Rivera_Order.pdf

  3. “David Stern was voted ” Attorney of the Year in 1998 & 1999 , by TA-DA Fannie Mae”

    Precisely why we need a bigger boat.

  4. This just in from … David Stern was voted ” Attorney of the Year in 1998 & 1999 , by TA-DA Fannie Mae… guess that was the ONE BIG client unidentified in the filing of the SEC Prospectus!

  5. Edge… don’t know where you are but the Shapiro Network of Attorneys work in many states.. this admission of not only being unable, but not willing to comply is good stuff for anyone up against them… and as I have said again and again they are on the “approved council” list @ Fannie Mae… with POA privileges.. so Fannie Mae in actuality has given them license to steal and present fraud on our courts all over America!

  6. Wednesday 11 August 2010

    PJ:

    Great find on the Shapiro admissions…thanks!

  7. Here is a good link on how Shairo tried to get out of “telling” the truth in foreclose to the courts in FL. Anyone out there in other states where Shapiro & Associates “operate” copy the motion within this link… on how Shapiro admits that foreclosure claims can not be “verified”!

    That NY judge who tossed Shapiro & De Caro’s case out of court should be applauded for seeing things for what they were and standing up to the Shapiro “Nationwide” Foreclosure Mill!

    http://floridaforeclosurefraud.com/2010/03/foreclosure-lawsuits-are-built-on-lies-shapiro-fishman-admits-foreclosure-claims-cannot-be-verified/

  8. Here is an interesting twist on people @ DJSP … read the artical and you decide. Interesting

    http://www.observer.com/2010/wall-street/right-and-honorable-kerry-propper

  9. The commentary is acurate but seems to suggest towards the end that debt securitization is per se invalid. i do not care to defend in any way the bizarre securitization practices that evolved in respect of fly-by-night lenders. There they created designed to fail mortgages, followed upon and intricately related to designed to fail trusts. The underlying purpose of both was to enable securizers to skim investor proceeds up front, shift value between classes or tranches within a trust —whether they be called simple MBS or complex CDO’s. The latter enabled the securitizer to predict the failure of mortgages and hence the worthlessness of certain classes of MBS/CDos. His co-conspirators could then be on the ready to buy higher value tranches when the bottom fell out 2007-8, when investors were unloading stuff that they did not understand. Then the last play is happening now. The servicer successor coolects current payments, distributes those payments in accord with the securitization docs, but holds the foreclosure proceeds in the collection account for the future benefit of the seniors—–but is entitled to keeo the income from the “held” monies as well as direct with whom those parked monies are invested–such as banks under common control by the servicer. Further, once the outstanding balance of investor notes are down to 10% of original face, the deep equity sponsoring SPV can call the remainder, pay them off and pocket any net. The trust then collapses. However, I am having difficulty seeing why these units would be called in since the face amount of those investor notes would seem to be high than the market of the underlying mortgage notes and mortgage collateral. Is there some trick that further cheats the investor on the backend when the trust collapses? Somehow accumulated foreclosure proceeds can exceed the face? Or does the sponser make a tender offer at a price lower than face?, thus being entitled to pocket the difference? Is there any evidence out there of tender offers aimed at closing out the trusts? This would appear to be manipulated securities fraud.

    In any event debt securitization goes way back and absent the distortions evidenced by the MBS/CDOs was straightforward. If BIGCO wanted to finance an income producing project, BIGCO would place the project assets into a trust and sell bonds backed by the trust-held assets. The tranches were slices of the future cash flow stream based on maturity. for example, a 30 year building lease would be divided up into the following: principlal and interest for the 1st 5 years [short-term bonds], then the 5-10 year intermediate term payments, then the 10-20, 20-30 long terms. Then the underwriters started to get fancy and did interest rate strips too. this effectively meant that a person could by rights to receive deeply discounted principal payments in 20-30 years with no payments in the meantime. This was something that they used to match fund insurance obligations and pension payouts projected to occur 20-30 years in the future. The underlying obligor was a BIGCO like GE—-that paid quarterly remittances of principal and interest to the trustee that went about distributing the funds to the tranches according to plan. As I look back the HUGE diference is the interest of the SERVICERS-they did not exist in BIGCO deals-still do not. Maybe just a coincidence but the trouble seems to occur simultaneously with the involvement of the servicers that seem to wera a lot of hats and become involved in handling the receipts, distributions, HOLDING and INVESTING UNDISTRIBUTED FUNDS, and of course foreclosures. PEOPLE, THE RULE OF FRAUD SCHEMES IS ALWAYS FOLLOW THE MONEY–THE GUY THAT HOLDS THE MONEY IS TYPICALLY THE FRAUDER and everybody plays Hell trying to get that money back once the ________ gets it. So who gets the foreclosure proceeds and what does that party do with that money? Answer those questions and you will have defined the fraudulent enterprise.

  10. *of course – but now it’s more like a term of endearment
    <<>>

  11. TW

    “Deadbeats” is meant to be sarcastic.

    PJ – agree – there is connection to Fannie MAE –

  12. 2 Anonymous… it appears that the Stern SEC filing was loaded with the same crap.. lies, false statements etc, that all the MBS filings were… it is up to the “investor” to decide… correct… did DJSP have a “rating”??? hummm

    But when you put this all together there are some interesting connects… will have to read a bit more and think about it.

    In the mean time everyone should be thanking Matt Weidner, Ice Legal and all the others in Florida that never let up, keep their eye on the ball. Kudos’ to them!

    And now that Shapiro and his cronies have been named people in each state where they “operate” should be banding together to bring this action to the attention of the state AG.

    I know I keep harping on this point but all three firm’s are “approved council” to Fannie Mae with POA privileges… that is a big issue here.. how do you think they became “Mill’s” in the first place… with the approval of the government… each and every person should be informed and outraged at how their tax dollars used to bailout a dysfunctional entity (part in parcel that propelled the current economic environment) are being used. To lie, cheat and steal!

    Nuf, said on that, hope people get it!

  13. Does anybody have copies of docs with Tonya Belchinger, asst secretary for Barclays d/b/a/ HomeEq?

    Either with her signature or in court docs where she might be mentioned.

    pls send to me carra2009@gmail.com

  14. Kudos to the Florida AG for the subpoenas and to all Floridians who worked hard to get the AG to listen.

    Everyone needs to make certain to communicate with your law enforcement on the fraud, fraudulent recordings etc.–that would mean local district attorney, state Attorney General and the FBI.

    If you have forged or fraudulent recordings, make sure to get certified copies when you present to these organizations or to the court.

  15. Oh look… here’s an interesting case;

    http://webinfo4.brevardclerk.us/facts/d_caseno.cfm?CaseNumber=05-2009-CA-060862-XXXX-XX

    *CLICK “Register of Actions” then download a copy of the Answer by City of Palm Bay, FL

  16. * I personally was barred from attending “public” foreclosure hearings in the 18th circuit of Florida… was told it was a “security risk.”

    Maybe if the judiciary was able smell the coffee through the stench coming out of their own kitchen, they would see that these are really CRIMINAL cases & not just foreclosure cases.

    You see – in the 18th they hold foreclosures in judges chambers and NOT in the high-tech courtrooms that have audio & video recording devices.

  17. okay – so WHO are the “deadbeats” that are ruining our communities?

  18. PJ

    Flipping out – yes PJ – And, when will the government stop protecting THOSE “investors”?? in fraudulent enterprises? Government has promoted it – ie. – they want to clear the market of the “deadbeats.” I say they have the wrong label for deadbeats – and far worse – shall we say “Crooks?”.

  19. 2 DinSFLA… great post… will affiliates include “payment” for services from Fannie Mae?

    2 Anonymous… not affiliated with the NYSE… but just a hunch and can bet that those that have filed suit against DJSP for fraud are FLIPPING OUT… just about now… sleep with dog’s expect to get fleas!

    Stern’s prospectus filed with the SEC should be read in every courtroom where his Mill is abusing the American people, mocking the POTUS and the judiciary! Then add to that Shapiro’s assault on a mandated order to verify documents submitted to the court in foreclosure proceedings by mill’s… and things should get interesting.

  20. Very very happy with Neil’s post. (no “buts” this time, Neil!!!)

    And, thanks DinSFLA and PJ and neidermeyer and others for DLJ updates.

    edgetraderplus – some are obvious for table-funding – by just looking at dates, blank assignment dates, etc. – others you have to ask for pre-arranged agreements. Almost all of these loans were table-funded.

    Now, let us bring in off-shore enterprises. Escape of 9/11 subsequent law as to undocumented funding and off-shore accounts?? And, IRS violation anyone??? Believe me, if it was you – they would get ya. Where is the Federal Reserve/US Government?? What are they doing?? Still chatting about “moral hazard.”?? We have bigger problems than “moral hazard.”

    Shareholders in big banks are not the source of fraud – it is the CEOs that are the source. How about returning the money, yourself, to the people – Mr./Ms. CEO?? But, of course, authorities have to act. No hiding under the rug.

    And, we do not even know – what else lies “beyond the deep” ocean – of fraud. There is more. But, we are…. on that path.

    Thanks Neil.

  21. 2 Neidermeyer… DJSP will be de-listed on the NYSE by the end of the month if not sooner after this bomb shell…

    Just like their “benefactor” Fannie Mae, who fund’s them with tax payer bailout funds to FORECLOSE ON AMERICAN HOMEOWNERS !

    Research the POA & Approved “Council” Documents on the FM web site… granted to these firms and your hair will stand on end! Good old wink, wink, nod, nod…

    Stern’s Prospectus filed with the SEC says it all!

  22. 2 TW… it seems that Mr. Tew, Stern’s legal council has answered that question for you… what he has said and quoated in the press is very usefull…

    Mr. Tew please explain how and where they were found and what data/ information was “used” to correct said documents…

    “Jeffrey Tew of Tew Cardenas LLP in Miami, who represents Stern, said his client is cooperating and that it is their position they have done nothing wrong.
    Tew said that, in the last few years, Stern’s firm has handled more than 100,000 foreclosure cases, and there have been fewer than 20 instances in which documents were “inadvertently misstated” and, when found, were corrected.”

  23. Alex Sanchez (President of the Florida Bankers Association) stated in his remarks to the Florida Supreme Court that notes were “destroyed”

    see here for pdf;
    http://www.foreclosurehamlet.org/forum/topics/florida-bankers-association

    *was this so they could be copied/cloned/counterfeited and sold in to multiple investment pools and insured with multiple sets of credit default swaps?

    this would make sense as to why “we the people” paid over $10 Trillion Dollars to fix a $1 Trillion Dollar problem!

    LOST NOTE??

  24. There are many other Law Firms in Florida they should include in the investigation, not just those three.

  25. They should be included on the investigation as well.

    Ben-Ezra & Katz, P.A.
    Foreclosure Investor’s Network

    Welcome to the Ben-Ezra and Katz, P.A. Foreclosure Investor’s Network. This unique service provides foreclosure investors with information about newly filed foreclosure cases, upcoming foreclosure sales and REO properties available for s

  26. Tuesday 10 August 2010

    Editor’s note, Quote:

    “But by operation of law, the originator’s interest is extinguished the moment it arises because it is in most cases a table funded loan in which the originator acted as a broker not a lender, and performed no underwriting tasks. So the legal obligation is extinguished at the same time that the legal obligation arises.”

    Can you elaborate how to prove/uncover table funding and thereby show that “the legal obligation is extinguished at the same time that the legal obligation arises?”

    It would be most beneficial for those who want to challenge the “servicer” and/or respond to a complaint for foreclose against them.

  27. Give Bill McCollum some encouragement ,, here’s the link to the Florida Attorney Generals “contact us” http://www.myfloridalegal.com/contact.nsf/contact!OpenForm&Seq=2&Section=Attorney_General

  28. DJSP closed at $3.45 was $13.65 in late April 2010 ,, too late to short??

  29. Excellent , we may actually untangle this whole mess when the true lenders get discovery now that they are getting control of the so caled trusts. I would love to see criminal charges against every attorney at these firms and permanent disbarrment if any of their cases are shown to have included forged documents or if it is discovered that this was the norm and they should have known.

  30. I will be sending this information to both the DA and the head of Banking Regulation in New York… each and every DA should be going after the “servicer’s” as well as they are party to the fraud!

    And let’s not forget that they are “approved council” for Fannie Mae! So in essence Fannie Mae pays for their services with our taxpayer bailout funds to FORECLOSE ON AMERICANS!

    Remember Shapiro & DeCaro had their case for PHH thrown out in NY last October… Neil if possible link the PHH case to this post as a “related post”

  31. Read it and either weep or laugh… you can not make this stuff up!

    Tuesday, August 10, 2010, 4:05pm
    Three S. Fla. law firms target of probe
    South Florida Business Journal – by Susan R. Miller

    Three South Florida law firms are the target of an investigation by Florida Attorney General Bill McCollum’s office.

    During a news conference Tuesday morning, McCollum said his office is looking at whether the firms engaged in unfair and deceptive actions in their handling of foreclosure cases.

    “We are seeing a paperwork trail where law firms, through a mill, prepared paperwork with signatures from lenders who had assigned the mortgage,” he said.

    The firms are identified as The Law Offices of Marshall C. Watson in Fort Lauderdale; Shapiro & Fishman, which has offices in Boca Raton and Tampa; and the Law Offices of David J. Stern, P.A. in Plantation.

    It is alleged that the firms, which were hired by loan servicers to begin foreclosure proceedings when homeowners were behind on their mortgages, may have fabricated mortgage assignments in order to speed up the foreclosure process.

    “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,” said McCollum, who is running for governor.

    In addition to his law firm, Stern is chairman and CEO of DJSP Enterprises, a publicly traded company (NASDAQ: DJSP) that touts itself as “one of the largest providers of processing services for mortgage and real estate industries in the United States.”

    That company’s U.S. operations are “supported by a scalable, low-cost back-office operation in Manila, Philippines, that provides data entry and document preparation support for the U.S. operations, ” according to a news release the company put out earlier this month when it announced it had hired Howard S. Burnston as its VP, general counsel and corporate secretary.

    McCollum said his office also is looking into whether the law firms created affiliated companies outside of the U.S., where the allegedly false documents are prepared. However, there was no clear indication McCollum was referring to Stern’s Manila operations.

    Stern’s law practice clients include all of the top 10 and 17 of the top 20 mortgage servicers in the U.S. DJSP Enterprises claims 1,000 employees, with additional operations in Louisville, Ky., and San Juan, Puerto Rico.

    DJSP Enterprises’ 2009 net income was $44.6 million on revenue of $260.3 million. In the first quarter of this year, it gained $5.4 million on revenue of $71.6 million, the company said in a news release. In the same period of 2009, it gained $13.3 million on revenue of $55 million.

    Jeffrey Tew of Tew Cardenas LLP in Miami, who represents Stern, said his client is cooperating and that it is their position they have done nothing wrong.

    Tew said that, in the last few years, Stern’s firm has handled more than 100,000 foreclosure cases, and there have been fewer than 20 instances in which documents were “inadvertently misstated” and, when found, were corrected.

    “With that kind of volume, there will be mistakes,” he said. “The firm realized it, they were corrected, withdrawn and proper documents substituted.”

    Tew said his client operates under the strict guidelines created by Freddie Mac and Fannie Mae, and that the foreclosure process is supervised by a circuit court judge.

    “Everything done is done by the judge who is there to protect the rights of the borrower and lender,” he said. “David Stern didn’t create that problem; he is representing banks who are entitled to foreclose. Since he is the visible person, he will get a lot of bad publicity. There’s been a huge train wreck and David is like the surgeon in the ER: He is part of the process.”

    McCollum’s investigation isn’t the only legal problem Stern faces. DJSP Enterprises is also the target of a shareholder lawsuit in Miami federal court that alleges it misled investors about the company’s financial prospects.

    “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,” a news release announcing the lawsuit stated. “However, in April 2010, when the company’s largest clients began real estate foreclosure conversion systems, DJSP revenue from mortgage foreclosures began to substantially decline. As a result of defendants’ false statements, DJSP’s stock traded at artificially inflated prices during the class period.”

    McCollum said that, while his office usually doesn’t announce investigations, “we have to protect consumers” and “we want people to know there are tens of thousands of mortgages out there where law firms are misleading the public, and it’s not proper.”

    Ashley Stone, office manager for Shapiro & Fishman, said firm had just received notification of the investigation on Monday and declined to comment.

    Judd Levy, an attorney with the Watson law firm, declined to comment.

    Tuesday, August 10, 2010, 4:05pm
    Three S. Fla. law firms target of probe
    South Florida Business Journal – by Susan R. Miller

    Three South Florida law firms are the target of an investigation by Florida Attorney General Bill McCollum’s office.

    During a news conference Tuesday morning, McCollum said his office is looking at whether the firms engaged in unfair and deceptive actions in their handling of foreclosure cases.

    “We are seeing a paperwork trail where law firms, through a mill, prepared paperwork with signatures from lenders who had assigned the mortgage,” he said.

    The firms are identified as The Law Offices of Marshall C. Watson in Fort Lauderdale; Shapiro & Fishman, which has offices in Boca Raton and Tampa; and the Law Offices of David J. Stern, P.A. in Plantation.

    It is alleged that the firms, which were hired by loan servicers to begin foreclosure proceedings when homeowners were behind on their mortgages, may have fabricated mortgage assignments in order to speed up the foreclosure process.

    “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,” said McCollum, who is running for governor.

    In addition to his law firm, Stern is chairman and CEO of DJSP Enterprises, a publicly traded company (NASDAQ: DJSP) that touts itself as “one of the largest providers of processing services for mortgage and real estate industries in the United States.”

    That company’s U.S. operations are “supported by a scalable, low-cost back-office operation in Manila, Philippines, that provides data entry and document preparation support for the U.S. operations, ” according to a news release the company put out earlier this month when it announced it had hired Howard S. Burnston as its VP, general counsel and corporate secretary.

    McCollum said his office also is looking into whether the law firms created affiliated companies outside of the U.S., where the allegedly false documents are prepared. However, there was no clear indication McCollum was referring to Stern’s Manila operations.

    Stern’s law practice clients include all of the top 10 and 17 of the top 20 mortgage servicers in the U.S. DJSP Enterprises claims 1,000 employees, with additional operations in Louisville, Ky., and San Juan, Puerto Rico.

    DJSP Enterprises’ 2009 net income was $44.6 million on revenue of $260.3 million. In the first quarter of this year, it gained $5.4 million on revenue of $71.6 million, the company said in a news release. In the same period of 2009, it gained $13.3 million on revenue of $55 million.

    Jeffrey Tew of Tew Cardenas LLP in Miami, who represents Stern, said his client is cooperating and that it is their position they have done nothing wrong.

    Tew said that, in the last few years, Stern’s firm has handled more than 100,000 foreclosure cases, and there have been fewer than 20 instances in which documents were “inadvertently misstated” and, when found, were corrected.

    “With that kind of volume, there will be mistakes,” he said. “The firm realized it, they were corrected, withdrawn and proper documents substituted.”

    Tew said his client operates under the strict guidelines created by Freddie Mac and Fannie Mae, and that the foreclosure process is supervised by a circuit court judge.

    “Everything done is done by the judge who is there to protect the rights of the borrower and lender,” he said. “David Stern didn’t create that problem; he is representing banks who are entitled to foreclose. Since he is the visible person, he will get a lot of bad publicity. There’s been a huge train wreck and David is like the surgeon in the ER: He is part of the process.”

    McCollum’s investigation isn’t the only legal problem Stern faces. DJSP Enterprises is also the target of a shareholder lawsuit in Miami federal court that alleges it misled investors about the company’s financial prospects.

    “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,” a news release announcing the lawsuit stated. “However, in April 2010, when the company’s largest clients began real estate foreclosure conversion systems, DJSP revenue from mortgage foreclosures began to substantially decline. As a result of defendants’ false statements, DJSP’s stock traded at artificially inflated prices during the class period.”

    McCollum said that, while his office usually doesn’t announce investigations, “we have to protect consumers” and “we want people to know there are tens of thousands of mortgages out there where law firms are misleading the public, and it’s not proper.”

    Ashley Stone, office manager for Shapiro & Fishman, said firm had just received notification of the investigation on Monday and declined to comment.

    Judd Levy, an attorney with the Watson law firm, declined to comment.

  32. PJ,

    You are correct that Shapiro & Fishman is part ofthe larger nationwide network of Shapiro law firms.

    Florida Default Law Group f/k/a Echeverria Law group and is now part of the Moss Codilis group – new name: Echevarria, Codilis & Stawiarski.

  33. It’s about time.

  34. The State of Florida needs statewide INJUNCTIONS to stop all foreclosures, and the HELOC “breach of contract” cases, right now.

    Mr. McCollum, you will be inundated with votes!!
    “Governor McCollum” sounds attractive to most looted Floridians.

    To get even more votes, when will you shut the notorious Florida Default Law Group down?

    See http://www.woodwardlaw.com

  35. Let’s see what comes of this, but the one good thing is that
    Shapiro & Fishman LLP were named, if I am correct they are part of the Shapiro Network of Attorneys with law firm all over the USA. If this can be confirmed the word should get out to every DA in every state where Shapiro & his minions have a collaboration.

  36. Another good post..Thank you Neil and the others for their contributions.

  37. what about california ? we are behind on pursuing these criminal. ATTENTION ATTORNEY GENERAL

  38. THE BELL CASE STUDY CONTINUES THIS IS GONNA BE A SNOWBALL AFFECT WE MUST CAPITALIZE AND BRING THE FORECLOSURE ON HOUSES AND SMALL BUSINESSES.

    http://latimesblogs.latimes.com/lanow/2010/08/maywood-city-council-seeks-divorce-from-neighbor-city-bell.html

    THANK YOU FLORIDA ATTORNEY GENERAL.

    NEVER AGAIN

  39. This is one of the best posts to date and says it all. You have to quiet the title on your dt/pn. You have to claim fraud against the perpetrators of the fraudulent docs, the lenders, pretend lenders, servicers and you ahve to get the judges to understand exactly what she says–NO ONE should get any freebies.

  40. It’s about time!

  41. Here is the link to the Attorney Generals press release…

    August 10, 2010
    Media Contact: Sandi Copes
    Phone: (850) 245-0150

    Florida Law Firms Subpoenaed Over Foreclosure Filing Practices

    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.

    4closureFraud.org

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