| ORLANDO, Fla.
ORLANDO, Fla. Nov 1 A Florida lawyer known as
the "foreclosure king" who allegedly left a string of fraudulent
legal documents and more than 100,000 abandoned court cases in
his wake is facing disbarment as a result of a court ruling this
A referee for the Florida Supreme Court issued a
recommendation this week that David J. Stern of Plantation in
south Florida be stripped of his license to practice law. The
Supreme Court typically follows its referees' recommendations, a
Florida Bar spokeswoman told Reuters.
Stern's law firm handled approximately 20 percent of the
foreclosures in Florida in 2009 at the peak of the housing
crisis on behalf of Citibank, Bank of America, Fannie Mae and
other major national lenders.
The firm raked in millions of dollars in fees but his
tactics caused "massive and irreconcilable damage to the entire
court system," according to a complaint filed in April by the
Stern has 60 days to appeal the referee's recommendation
once it reaches the court's docket. Stern's lawyer, Jeffrey Tew,
did not immediately return a call for comment.
The referee, Palm Beach County judge Nancy Perez, concluded
after a trial that Stern's goal was to beef up his business and
income to help him achieve a high price for the sale of his
mortgage document processing back office operation. Stern
received $58 million when he handed off the back office business
to DJSP Enterprises, a publicly traded company he
Perez found the root cause of many problems was Stern's
acceptance of a "tsunami" of foreclosure cases from major
lenders which he then placed in the hands of his overloaded
associates, most of whom were new and inexperienced. In 2008,
these lawyers averaged more than 1,600 cases each, according to
Six circuit judges testified about the problems Stern or his
associates caused in their courtrooms. The report described the
filing of falsified documents, and lawyers skipping court
hearings and ignoring court orders.
"His failure to exercise care resulted in massive injury to
the system," Perez wrote.
Perez wrote that Stern's firm forged documents as far back
as 1999, and that Stern was publicly reprimanded in 2002 for
filing an affidavit that contained inaccurate information.
Perez found as an aggravating circumstance the fact that
Stern claimed he did not have sufficient resources to withdraw
properly from his pending cases, which she found in conflict
with his net worth statement.
In January 2011, DJSP sued Stern, accusing him of fraud for
allegedly inflating revenue by cutting corners, including
letting workers sign foreclosure documents without reading them,
a practice known as "robo-signing."
The lawsuit also said Stern awarded bonuses and "extravagant
gifts" to workers who could churn out foreclosures quickly.
Stern closed his law office in March 2011.