Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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arkygirl
The Law Offices of David J. Stern, which has helped banks seize thousands of homes from homeowners who missed mortgage payments, is now having trouble paying its own bills. One of its subsidiaries is seeking bank forbearance for defaulting loans, and the shrinking company has fallen behind on rent payments at its Plantation offices, according to a regulatory filing Monday.

DAL Group LLC, a subsidiary of Stern's public foreclosure-procesing company, DJSP, entered into a forbearance agreement with Bank of America on Friday, for a $12 million revolving line of credit. The bank, which had sent DAL a notice of default on Nov. 5, agreed not to take further action until Nov. 26, as the embattled company tries to develop a new operating plan.

Jeffrey Tew, an attorney for Stern's law office, declined to comment on the public company.

"It's all in the filings," he said.

The company took out the $12 million line of credit in March with a one-year, interest-only payment plan, and the loan was to be paid in full after a year. The default notice found that Stern owes $549,412 on the loan.

Other lenders with subordinated loans have also agreed to forbear Stern's debts temporarily, as the company looks to restructure.

The law firm has already stopped paying some of its bills. The company also has not paid its rent for the month of November at its office space at 900 S. Pine Island Road, in Plantation.

Richard Burton, a Miami foreclosure defense lawyer working on a class action suit for homeowners disposed by robo-signers, said Stern's current money trouble was "poetic justice."

"It would probably make more sense if they reduced the principal on the loan,'' he quipped. "That would allow him to stay in the building. He can hire someone like myself to help him."

Much like the troubled real estate market, Stern's firm has been enduring a post-boom decline of its own recently. After the growing five-fold in the last five years to more than 1,100 employees, a lightning round of negative news has leveled the foreclosure-processing giant in the last few months.

Attorney General Bill McCollum named Stern in a state investigation of fraudulent foreclosure practices in August, and former employees emerged in October with tell-all testimonies describing widespread document tampering at the firm.

In the past few weeks, three major banks and Fannie Mae and Freddie Mac have stopped working with the firm. Earlier this month, Stern laid off hundreds of employees, bringing its remaining workforce to about 400, said Tew.

The same day layoffs were announced, employees from a document shredding company spent hours taking boxes from the firm to a truck parked outside.

The DJSP stock price fell 32 percent on Monday to close at $0.48. It has plunged more than 95 percent since April, when it peaked at $13.65.

In a letter announcing the layoffs to Florida Agency for Workforce Innovation, a Stern representative wrote that a complete closing of the firm "remains a possibility.''

Looking to avoid that fate, Stern has brought in Tampa consulting firm Gulf Atlantic Capital to help it restructure.

Like many homeowners currently going through foreclosure, Stern is looking for a little leniency and patience from its lenders as it deals with tough financial straits.

"DAL intends to seek longer term forbearance agreements with the bank and its other creditors as it implements plans to restructure its ongoing operations to reflect its significantly reduced revenues and operations" the company filing said.

However, if things don't work out as planned, the inevitable result could be closing shop: "If it is unable to accomplish any of the foregoing, it will not be able to continue its business operations," the filing read.
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arkygirl
"Leniency and patience"....hmm, he deserves as much as he gave others. That would mean that he should be dispossessed any day now.

Forgot the link:

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

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Sara
I guess he overextended himself, living in all his glory...

Poor baby...

S
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As I said in a post when the Stern news broke - I am waiting for them to seize his yacht and foreclose on his castle.  Justice, poetic or otherwise, isn't fully served until it hits him personally.   Humm - I wonder if BoA holds the mortgage on the castle?  
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His good neighbor should offer him pennies on the dollar for all his car's!!!Lets see how Mr.Stern like's vulture's circling the carcass
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WTF, why should anyone give him a break?  He deserves the same break he gave all the homeowners who lost their homes to this, dare I say it, deadbeat that he has become because of his own greed.  Yes, Stern is now officially a deadbeat because he cannot pay his rent or bills.  Can't keep from laughing.  I am praying to the Almighty that Stern and gang be brought down to the same level that he put homeowners. Stern and gang did not show one ounce of compassion for these people.  So any Stern worshipers and followers who may be reading these posts, payback is coming.  Hey, Stern remember when you bragged that he foreclosure business was great.  Bet you never thought you would be on he other side of it all, did you?  Hey, Mr. Tew, has Stern paid you lately to keep doing doing his dirty work?  

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George Burns
That an incorporated entity  that he controls is in financial difficulty does not mean that it has any efffect on his personal finances. That is why you form a company and incorporate with limited liability.

Donald Trump, for example, has never been personally affected to any meaningful extent, by  the many bankruptcy filinngs of his various enterprises.
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It all depends if he was spending it as fast as he was making it.  Many "new money" folks were living on the edge when The Great Depression II hit.  Its why there are multi-million homes in Florida on Realtor.Com with pictures of empty rooms.  Trump is into so many things that a bankruptcy here or there isn't felt personally.

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In response to George Burns, our construction company was set up as a corporation to protect our personal assets or so we thought.  When our business failed and we could no longer make payments to the creditors, our business creditors started to sue us personally.  So our personal as well as business debt was included in BK.  I know several other people that has happened to also.

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The big players, especially public company officers, never personally guarantee a corporation's debt.  That is reserved for us little guys.  Believe me, I know all  about the pain of signing personally for a companies debt.  But if you don't sign personally you will not get the money and when you need the money you sign.

As I said, lots of the rich also live pay check to pay check.

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William A. Roper, Jr.
The general concept that you folks are discussing as to STERN's personal liability it termed "piercing the corporate veil".  Whether it is easy or hard depends both upon the regularity and conformity of the incorporated business to the corporation laws, the segregation of accounting, and the nature of the acitivities perpetrated by the officers and directors.

One type of activity that can quickly get officers and directors in trouble is when there is co-mingling of funds, as when the officers and directors treat corporate bank accounts as a personal piggy-bank, ignoring the corporate distinction when they want to dip into the till, only to interpose the corporate fiction when convenient.  Deposition testimony that one or more of the corporations may have directly paid expenses of certain key employees is pretty damning in terms of piercing the corporate veil.

The points about personal guarantees of corporate debt are good ones and directly on point.  If an officer or director DOES guarantee corporate obligations, then they may find themselves personally responsible.  I am somewhat doubtful that STERN is going to have made any such guarantees.

Yet another problem for STERN and the other insiders though is that the corporate veil is NOT going to protect them against claims as to personal torts.  It is one thing when you are running an enterprise LAWFULLY and it fails for business or commerical reasons.  It is quite another matter when the corporation and its officers and directors are actually engaged in ongoing criminal behavior.  This criminal behavior is very often going to turn out to also be a civilly actionable tort.

Of course, we can count of the fact that STERN will have parked and hidden money off shore.  Forum participants seem to be OVERLOOKING the fact that STERN actually SOLD the complementary foreclosure document processing business BEFORE things collapsed.  This reflects the fact that STERN KNEW that his franchise was crumbling!  He had already CASHED OUT and no doubt has stashed some money away.  But there may also be some securities fraud charges in his future.

There seems to me to be little doubt that STERN's future can be either comfortable or bleak depending on the aggressiveness with which state and federal prosecutors pursue him.  And it wouldn't surprise me if he is able to get a deal and some lenient treatment by actually ROLLING on the FNMA and FHLMC officials, as well as Florida Judges, who will emerge as being on his payroll.

It is important that we all persistently communicate to our elected officials our insistence that this man be fully prosecuted.  However, I would be more than willing to see a couple of years shaved off of his sentence if it resulted in the criminal conviction of Florida Judges and the stripping of pensions from retired judges now involved in rocket docket abuses.

I think that we need to stand ready as taxpayers to fund the construction of new prison work camps to be inhabited by robo-signers, foreclosure mill lawyers, FNMA and FHLMC officials and corrupt judges!  These ought not be pleasant places!!   
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We thank you Mr. Roper.

I am hoping that his 100-foot plus dingy is registered in the name of his company and that it has been fully deducted each year as a business expense, including the damn diesel fuel.
  Oh, and that someone will produce some photos of BoA, Chase, and Wells executives soaking up the rays on the sundeck.  Throw in a judge and/or his or hers clerk sipping a Margaretta and we'd have a beautiful package.  Judges and lawyers regularly socialize, so it is not out of the question.



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Good I hope they take evrything from him

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Shortcuts on the foreclosure paper trail.

http://www.heraldtribune.com/article/20101128/ARTICLE/11281042/2055/NEWS?Title=Shortcuts-on-the-foreclosure-paper-trail

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