Riding the Foreclosure Gravy Train

October 19, 2010 by  
Filed under Economics

I read an article this morning about an attorney in Florida who has become uber-wealthy because he runs a foreclosure processing business. He owns multiple mansions, exotic cars and a yacht. I tried to get angry about it but I really couldn’t.

This attorney’s business is in Florida which ranks #3 on the foreclosure avalanche scale. His firm charges customers a $1400 flat fee per foreclosure. His customers are banks. That is not a high fee which is why his firm has so much business. He is earning extraordinary profits because of high volume and efficient operations.

No doubt his firm pushed the envelope on being diligent with paperwork.  On the other hand, there are no particular allegations that I could find that his business wrongfully foreclosed on innocent homeowners.

Although being a foreclosure machine would not appeal to me, you have to admire someone who builds a successful business on doing one thing and doing it well. But that doesn’t matter to a lot of people. The business owner is a lawyer, he is rich, and his business is legally forcing homeowners in default out of their homes. That makes him a villain.

Heck, to a lot of people, just being a lawyer makes you a villain.

What is your take? (Link below)

Foreclosure Fortune Buys Bugatti, Yacht, Mansions for Attorney


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21 Responses to “Riding the Foreclosure Gravy Train”
  1. Rick Beagle says:

    Based on your version of the story, as the token Liberal here, I have no problem with Mr. Stern making a fortune on the misery of others. However, after reading the entire article, there is plenty about Mr. Stern that seems villainous.

    MasterPo, read the article all the way to the end. I think we might be able to find some common ground here…. :-)

  2. Weston says:

    “On the other hand, there are no particular allegations that I could find that his business wrongfully foreclosed on innocent homeowners.”

    Huh? His firm is under active criminal investigation by the Florida Attorney General’s office and at least one former employee has testified under oath that they regularly faked (and filed with the Court) documents (possibly numbering into the thousands)

    The allegations may not at a later date be found to be true but to say there are “no particular allegations” is absurd.

    • Weston – Faking documents to cut corners is a problem that should be addressed. What I referred to was a circumstance where a loan that was not in default and not subject to foreclosure was wrongfully foreclosed. To me, there is a difference.

      • Weston says:

        I agree to a certain extent and disagree to an equal degree. First of all you can call it “cutting corners” I call it intentional fraud on a court.

        I also think that your perspective made a lot more sense back in the days when you borrowed from a bank and they remained your creditor. We live in a world where you now enter into a mortgage/note/contract and your obligation is then sold, resold, repackaged etc and ad infinitum.

        You seem to be framing the argument as the defendant is in default so they should pay or be foreclosed on even if the Plaintiff can’t comply with the code of evidence and prove that they are the ones who are owed the money.

        Most foreclosure defenses today is simply saying to the Plaintiff, “Ok,
        prove that the defendant owes you the money.” It’s not prove that the
        defendant borrowed money from someone. It’s prove that he owes YOU the
        money. And these banks can’t do it. They can’t show clear chain of title of the Note. And many of them (including allegedly Mr. Stern’s firm) have submitted forged and perjured documents to try to get around their legal obligation. I don’t consider this cutting corners I call it criminal fraud.

        Are you saying that if you entered into a large contract with someone, and you don’t pay on that contract, and some company you never heard of (and which may be very well be the 5th or 6th assignee of this debt) sues you you’re just going to pay them even if they can’t provide you with proper proof that they are the proper party to be suing you?

  3. kitty says:

    I am with Rick and Weston here even if I am not a liberal. Cutting corners (or fraud) increases the risk of an innocent homeowner is foreclosed upon. Whether it’s actually happened or not is irrelevant. It’s like safety rules being violated – most of the times nothing will happen, but it’s this 1/1000 case that may happen that can cause a lot of damage. So even if he was lucky up to now, if he hasn’t validated the papers thoroughly for each case, it’s only a matter of time before a mistake is made. Not to mention that nobody shall be allowed to commit fraud.

    I don’t have a problem with a lawyer working in foreclosure business – somebody has to. If a person doesn’t pay and is in default, he or she should lose the home. But illegal behavior is not acceptable.

  4. MasterPo says:

    All this foreclosure stuff sounds like the same old legal sleaze (no offense TML) that people hear all the time (“Depends how you define ‘did'”, etc.).

    I don’t pretend to understand real estate law or title searching. But it seems to me this is all just an argument over who has the right to foreclose and take possession of the property and *not* if the property should be foreclosed upon.

    Good for this guy to find a need and fulfill it. Wish I could have been part of that start up.

  5. Rick Beagle says:

    So, why do you think he incorporated his business in the British Isles? How about those title deed searches by a company in the Phillipines? Oh and he sold part of his business to China? Insert joke about them getting experience in foreclosing on America…. And this guy “allegedly” has no problem falsifying documents. (how many times have you been reprimanded by the courts TML? is that a common thing to happen??)

    But when people start sniffing around his business, he cries about the evil liberals to his right wing buddies?

    Seriously, this guy is the poster child for the corruption is our business leaders that we liberals bemoan on a daily basis. It isn’t that he is making a buck that we oppose, it is the method by which he goes about achieving that goal. To paraphrase from an oft quoted cliche, “the means DO matter”. And it is repugnant to me that you folks think it is okay as long as he is making a buck.

    /palmforehead

    Honestly, I do not understand today’s modern conservative movement. It really does seem to be all about greed.

    Peace.
    Rick Beagle

  6. MasterPo says:

    Why do people have Cook Island bank accounts?

    Same reason.

    You (and other libs) should be asking: WHY do sooooooooooo many businesses and people find it more beneficial to be registered aboard than here? What is it about American laws and policies that turn away business?

    As I’ve said many times before: The purpose of any business is to make as much money as it can for the owners. PERIOD.

    NO ONE starts a business with the #1 intent to give jobs and healthcare and retirement and paid leave etc to others. NO ONE. And anyone who does won’t be in business very long.

    ps- Ricky – Sell it to someone else. ANY ON who says money isn’t important to them is either a FOOL or a LIAR!

    If conservatives are all about greed then what does it make the ultra libs in DC and Hollywood? They are some of the richest people in the country!!

    • Rick Beagle says:

      “You (and other libs) should be asking: WHY do sooooooooooo many businesses and people find it more beneficial to be registered aboard than here? What is it about American laws and policies that turn away business?”

      Actually, us libs understand exactly why this is occurring, but conservatives are too stupid and short sighted to understand the ramifications of their own misguided notions and policies.

      As for Hollywood being very rich, what the heck does that have to do with the idiot in this article who is “allegedly” breaking laws? How seriously deep in the koolaid are you where you can’t understand that liberals have zero problem with people making money, but we do have a problem when they do so illegally, or with the intent of harming someone (defense industries are a necessary evil, but dumping your toxic waste behind an elementary school is just evil).

      Why do you and your “friends” have a problem following the law? Why do your heroes find it funny to avoid paying taxes on money they make in this country? Why do your friends in power allow laws that support and encourage this? Why do you not understand that this guy efforts to avoid paying taxes is directly responsible for your increased taxes?

      Think that through. Close a few loopholes and tada, we generate more revenue. What a thought.

      Proof again that the tea baggers really are a clueless bunch.

      Peace.
      Rick Beagle

    • kitty says:

      Did you even bother to read the referenced article which mentions charges of fraud against the guy? It’s fine to be in a foreclosure business or any other business for that matter, and yes profit is the valid motivation, but the business has to be legal and follow the law. Otherwise you get mafia. Nobody is allowed to commit fraud. I don’t understand how you can justify outright violations of the law that this guy is accused of. Now, we should presume that he is innocent until proven guilty, so I should qualify it with “assuming that allegations against him are true”, although the allegations in the article sound very convincing.

      I am not even a liberal, and I have argued with Rick many times here, but in this case I agree with him and really don’t understand you. Do you condone businesses violating the laws?

      There are a number of homes that have been illegally “trashed out” because of foreclosure “mistakes”. Some of these homes were paid in full, others were current on their mortgage. In fact, I found quite a few more cases out there which I may post in the evening. In all cases, it was an uphill battle for the owners to stop it even with papers proving clean title. Just stop and think for a moment how you’d feel if something like this were to happen with you. Many of these mistakes were the result of illegal actions similar to the ones mentioned in the article. Even if this particular lawyer hadn’t been directly responsible for any wrongful foreclosure yet, it’s the practices like those he (ok – allegedly) engaged in that cause it, so it’s just the matter of time really.

      This is by the way a case where the auction of a house that was current on their mortgage (to a completely different bank) was nearly averted, but it outlines the difficulty the rightful owner faces to stop the illegal auction of their home:
      http://foreclosureblues.wordpress.com/2010/07/18/countrywide-tries-to-foreclose-on-wrong-house-again-from-naked-capitalism/

  7. Weston says:

    Kind of surprised by the political nature of most of the comments.

    However, I will join in only to the extent that I (as someone who was quite liberal in my 20s and 30s but who has found myself voting very conservatively over the past 12 years) must have missed the memo stating that expecting someone to follow the law and not commit crimes has somehow become evidence of a negative and liberal bias.

    • Rick Beagle says:

      Weston,

      Don’t mind MasterPo and I, we do this on a regular basis.

      In part because these posts are often talking points from Fox news, and in part because MasterPo and I are grumpy old men.

      Of course, since I am the smart good looking one – I am a liberal, and since he was dropped on his head as a child, MasterPo is our resident Tea Partier. Every now and again he escapes from the attic, where is he is drawn to this blog to post some insane noise he heard from a fat man on the radio. And I of course spread nothing but truth and goodness, the cornerstones of progressive ideals.

      At least that’s my side of the story. :-)

  8. A collateral problem is the title. When a person tries to buy a house, even nonforeclosed ones, many times the title company will not insure that the title is free and clear.

  9. MasterPo says:

    Ricky – I’m not old!

    (nor am I a member of the Tea Party)

    Allegations mean nothing. If you ever ran a business you would know that anyone can make a claim for anything against you. In fact, I’d go so far as to say if you don’t have any compaints against you then you’re not working hard enough!

    What did you expect from people who this guy is trying to foreclose on? Warm hearted thanks and chocolates?! Of course people are going to make complaints, real or not, to try to get this guy off their backs.

    Duh!

  10. kitty says:

    Why is my previous comment – the one with links to more foreclosure mistakes including one from the particular lawyer mentioned in this article has been showing “awaiting moderation” for several days now?

  11. kitty says:

    @TML – what did you do with my comment that included links to various foreclosure mistakes including one link that specifically pointed to this lawyer and outlined his behavior?

    It was in “awaiting moderation” state for days, but now it just disappeared?

  12. jimmy37 says:

    Let’s examine the allegations: “Employees repeatedly signed affidavits without reviewing them, forged signatures, and improperly notarized and backdated documents”

    Forged signatures? Not if you had some sort of legal document allowing you to represent them.
    Improper notarization? Notaries are required to countersign that they saw the person in question signing. This is incompatible with a “factory” operation. It’s wasteful to have notaries sitting around waiting for someone to sign a document.
    Backdated documents? Were they backdated to jibe with workflow or to commit fraud?
    Signing affidavits without reviewing them. This is the most egregious charge. This is where your neighbor’s house gets foreclosed on instead of yours.

  13. Weston says:

    Jimmy37

    When you say ….

    “Notaries are required to countersign that they saw the person in question signing. This is incompatible with a “factory” operation. It’s wasteful to have notaries sitting around waiting for someone to sign a document.”

    This is a completely incorrect analysis. In fact is absolutely compatible with a “factory” operation. It costs very little to become a notary in Mr. Stern’s state of Florida. If you go into any decent sized law firm in Florida I’ll bet that a large proportion of the secretaries are also notaries.

    The signer goes into the office of the secretary next door. Says “Donna. I need you to notarize these”. Then begins signing at a rapid pace while the notary/secretary starts stamping and signing at an equally rapid pace. They don’t even have to ask the signer for I.D. since they have lunch together in the break room every day.

    It is in fact the essence of a “factory” legal operation.

  14. Weston says:

    Just as an update, Mr. Stern is now scrambling to pay his own bills. If his house goes into foreclosure I wonder if he is going to raise any defenses.

    http://www.sun-sentinel.com/business/fl-stern-finances-1116-20101115,0,6989295.story

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