Abogado David J Stern renuncia a la presidencia de su bufete

Foreclosure attorney Stern leaves as chairman of subsidiary firm

10/21/2010 © South Florida Sun-Sentinel

Plantation foreclosure attorney David J. Stern, who is under investigation by state regulators over his law firm's alleged mishandling of tens of thousands of foreclosure documents, has left his position as chairman of the subsidiary company that handles most of his law firm's paperwork, the Securities and Exchange Commission said.
The SEC disclosure came Wednesday as calls increased for The Florida Bar, which is also investigating Stern's operations, to use its state constitutional authority to regulate attorneys' conduct and take steps to discipline law firms that have become what some say are "foreclosure mills."
"The Bar should step up and regulate this. It must insist that attorneys involved in handling foreclosures comply with the rules of the court," said Diane Thompson, an attorney with the National Consumer Law Center who is an expert on mortgages.

Tom Pahl, an assistant director at the Federal Trade Commission involved with new regulations for lawyers doing loan modifications, said foreclosure practices need more scrutiny by state bar organizations. That's especially true in Florida, Pahl said, noting Florida Attorney General Bill McCollum is investigating Stern and other firms, whose attorneys have argued in court that The Florida Bar — not state regulators — has jurisdiction.
"It's hard to make that argument when [the Bar] doesn't bring many cases against lawyers harming consumers," he said.
Kenneth Marvin, The Florida Bar's director of lawyer relations, said he is spending "hours every day" on the foreclosure issue.
Stern and Marshall C. Watson, the head of a foreclosure firm in Fort Lauderdale, are being investigated by both the Bar and McCollum's office. The Attorney General also is investigating Shapiro & Fishman LLP, with offices in Boca Raton and Tampa, and the Florida Default Law Group in Tampa regarding its foreclosure practices. And several other attorneys doing foreclosure work for lenders and loan services are under Bar scrutiny.
DJSP Enterprises Inc. — created when Stern sold his law firm's non-legal operations to DJSP for $58 million — announced lead independent director Stephen J. Bernstein was the new board chairman but that Stern continues as CEO. Several other DJSP executives, including president and COO Richard Powers and CFO Howard S. Burnston, voluntarily resigned, according to an SEC filing.
Chris Simmons, director of investor relations for Stern, could not be reached for comment despite several attempts by phone. The law firm representing Watson also could not be reached for comment despite several attempts by phone.
Stern could face more serious sanctions under his current Bar probe because he has received a public reprimand before. In 2002, the state Supreme Court found that "in the interest of expediency and to maximize your own profit," Stern had filed misleading affidavits in regards to title insurance.
The court said the documents claimed the title services were out-of-pocket costs, when in fact they were performed by employees paid by Stern's law firm. Marvin said punishments can be more severe if lawyers are cited for offenses similar to ones they previously were reprimanded for.
Bar investigations are against individual attorneys, not law firms, and can lead to various penalties that must be ordered by the Florida Supreme Court: reprimands, suspensions and disbarments for a specific time period or permanently.
Reports continue to surface about overworked clerks and managers, who hugely outnumber the firms' attorneys, pushing through piles of shoddy paperwork as the lenders and loan servicers they work for pressure them to finalize foreclosures.
In the wake of the revelations, state lawmakers and congressional leaders have called for reform and greater oversight of the foreclosure process in Florida and other states where the courts handle such cases. In addition, several major lenders have said they are reviewing their processes and some have moved to halt foreclosure-related proceedings.
The Bar has sanctioned 616 attorneys since 2008, including some involved in mortgage or loan modification fraud. The Bar, concerned about foreclosure specialists partnering with lawyers as a way to circumvent laws barring upfront fees, opened 195 investigations involving loan modifications in 2009, with some attorneys tied to multiple investigations.
Bar records show no attorneys this year have been disciplined regarding improper foreclosure document practices, and the Bar has not issued any alerts.
A typical Bar investigation takes around two years to complete, Marvin said, although the process can be fast-tracked for emergencies. He said permanent disbarment for Fort Lauderdale attorney Scott Rothstein, now in prison for defrauding clients out of millions in a Ponzi scheme, took only about a month because Rothstein agreed to the action Marvin would not say if the Bar was considering fast tracking the foreclosure investigations.
New depositions released this week by the Florida Attorney General's Office included testimony from a Stern legal assistant who said her manager would sign up to 1,000 documents daily without reviewing their accuracy. Manager Cheryl Salmons was so exhausted, she authorized three paralegals to sign her name, assistant Kelly Scott said under oath.
Attorney Jeffrey Tew, who represents Stern, declined to comment on potential penalties given Stern's previous reprimand.
Christopher Immel, a foreclosure defense attorney at Ice Legal in Royal Palm Beach who has deposed lawyers about questionable documents, said it's often difficult to get information about improper documentation procedures because frontline attorneys and others who are familiar with such practices fear they will implicate themselves if they are disclosed.
"It's difficult to say how active the Bar will be, and if they will be going after the senior attorneys," he added. "This is widespread abuse through an entire firm."

Staff writer Harriet Johnson Brackey contributed to this report.
Diane Lade can be reached at 954-356-4294 or dlade@sunsentinel.com.