The Fall Of A Foreclosure King


The Atlanta Journal-Constitution has posted an article about one of Florida’s top foreclosure lawyers, David Stern. The worse the housing crisis got for homeowners, the wealthier Stern became.

When homeowners got behind on their mortgage payments, the bank would turn it over to a “foreclosure mill,” like the one owned by Stern. The foreclosure mill would push the foreclosure through the courts on behalf of the bank. Some of Stern’s clients included big name banks like GMAC, Goldman Sacs, Bank of America, Citibank and Wells Fargo. At industry meetings Stern would even brag about how well he was doing, saying that he was glad that the government’s homeowner relief plan efforts were failing.

Stern continued his life of luxury as the “foreclosure king” until last fall when he became the subject of an intense investigation and class action lawsuits. Stern’s crooked success is representative of how the foreclosure industry has operated in the past decade or so. Stern’s actions shed light on how banks and their law firms have designed a “quick-and-dirty foreclosure machine” to take as many houses from as many homeowners as they possibly can.

Stern’s employees churned out bogus mortgage assignments, faked signatures, falsified notarizations and foreclosed on people without verifying their identities, the amounts they owed or who owned their loans, according to employee testimony. The attorney general is also looking at whether Stern paid kickbacks to big banks.

“What Stern represents is an industry that was completely unrestrained, unchecked, unpunished and unsupervised,” says Florida defense attorney Matt Weidner. “This was business gone wild.”

Not long ago, the world of back-office bank procedures was of little interest to the public. But revelations last fall about robo-signers powering through hundreds of foreclosure affidavits a day, without verifying a single sentence, changed all that. Today the banking industry’s eviction juggernaut is under intense scrutiny as allegations of systemic foreclosure fraud mount.

State and federal regulators, along with the 50 state attorney generals, are conducting an investigation into the foreclosure industry. There are more and more class action lawsuits taking shape and because of the corruption of the foreclosure industry, the courts are ruling in favor of homeowners and not the banks.

Stern is no stranger to trouble with the law. He was named in a class action lawsuit in 1998 for “padding fees on foreclosed homes” and settled for $2.2 million. Fannie Mae was warned of his past misbehavior, but they still gave cases to him to work. In 2000, he was sued again, this time by a former employee for sexual harassment.

The firm’s fall has spawned more chaos in Florida’s circus-like foreclosure courts. A slew of homes Stern foreclosed on that sold for $240,000 each during the credit bubble sold at auction as orphaned cases for $200. Recently, even the most infamous “rocket docket,” in Lee County, where judges were reported to have signed off on a foreclosure every 30 seconds, ground to a virtual standstill as the Stern firm withdrew from case after case. Some of Stern’s remaining lawyers show up court with greasy hair, fleece jackets and food-stained clothing. As for Stern, if federal and state prosecutors file criminal charges, he could end up in prison.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us. We have also started handling bankruptcy cases.

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