Archive for March 23rd, 2011

Florida Bar Investigations on Foreclosure Lawyers

In today’s Palm Beach Post, Kim Miller explains how The Florida Bar has an increasing number of grievances it is investigating regarding foreclosure-related issues.  Will anything become of these grievances?  Who knows.  What’s discouraging in that regard is how David Stern is still able to practice law despite abandoning clients in thousands of cases and suing clients who he currently represents.  I’m quoted in the article on that issue.

Here is the article…

Florida Bar President Mayanne Downs predicts some Florida attorneys will pay the ultimate professional price for foreclosure-related wrongdoing – disbarment – as investigations mount statewide.  “It’s the death penalty of the legal profession,” said Downs, who spoke to The Palm Beach Post’s editorial board this week about legislative proposals affecting the courts and the state’s ongoing foreclosure tumult.

The bar, which is responsible for investigating complaints of attorney misconduct, has 222 foreclosure fraud cases open on 157 lawyers.  Those numbers are up from the end of 2010 when there were just 69 cases pending on 48 lawyers.

While specifics of the cases are not public, complaints generally about the handling of foreclosures have included knowingly forged signatures on court documents, bad notarizations on assignments of mortgage and shortcuts taken that led to illegal home repossessions.  There are also 28 open bar investigations on 23 attorneys stemming from foreclosure defense complaints.

Although homeowner advocates have grumbled at what they say is a lack of action taken by the Florida bar, Downs assured that her group is taking accusations seriously, even hiring Sunrise-based attorney Joel Klaits to work specifically on the investigations.  “We wanted a consistent approach,” Downs said about hiring an outside attorney. “No one has suggested we should slow down our efforts to discipline lawyers involved in this and we haven’t.”

The bar’s investigations are separate from inquiries the state attorney general’s office is making of eight Florida law firms that represent banks in foreclosure proceedings. Five of the firms, including the once mammoth operation of David J. Stern in Plantation, have full-blown investigations ongoing by the attorney general’s economic crimes division.

Still, some defense attorneys question why leaders in the so-called “foreclosure mills” have not been suspended pending the outcome of the investigations.

“Stern should absolutely be on emergency suspension,” said Tampa-based foreclosure defense attorney Mark Stopa. “He is counsel of record in numerous cases, and has admittedly abandoned his clients in those cases. This has caused untold chaos for courts and litigants throughout the state.”

Earlier this month, Stern notified judges he would no longer handle foreclosures as of March 31, leaving as many as 100,000 cases statewide in limbo as they are transferred to other law firms. Palm Beach County’s share of those cases is nearly 9,000.

“We have been forced to drastically reduce our attorney and paralegal staff to the point where we no longer have the financial or personnel resources to continue to file Motions to Withdraw in tens of thousands of cases that we still remain as counsel of record,” Stern wrote.

Stern’s firm lost most of its foreclosure business in the fall following allegations that employees mishandled court documents.

Downs said much of the lawyer-related foreclosure problems stem from a lack of education and oversight of young attorneys.

In January, the bar began offering a free online course for attorneys on handling foreclosures.  It has been downloaded 3,500 times, Downs said.

Mark Stopa

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