2consistently engages in consumer fraud. While it is true that particular foreclosuredefense attorneys acted in contravention of the ethical regulations of their state’s bar,those attorneys represent a nominal fraction of foreclosure defense attorneys, were promptly disciplined by their state’s bar, and have otherwise been managed by the legalcommunity. Because the actions of a few attorneys hardly represents a systemic issuewithin the foreclosure defense bar, and because only approximately 3% of homeownersretain counsel, regulations that further restrict the availability of licensed legalrepresentation only exacerbate the housing crisis. Further, conspicuously absent from theregulation’s purview are restrictions on foreclosure prosecution attorneys. The documentsattached to this request as “Appendix A” and “Appendix B” demonstrate the need for such regulation because they regard unethical conduct by Florida’s largest “foreclosuremill,” The Law Offices of David J. Stern, P.A. despite previous bar sanction.Federal Housing Association/Department of Housing & Urban Development. TheFHA/HUD is closely involved with 100-percent government owned entities Fannie Maeand Freddie Mac (FMFM). FHA/HUD/FMFM run a direct sourcing program in whichmortgaging servicing companies refer foreclosure files to law firms. Firms in the program are allowed to submit less documentation than firms not in the program. TheLaw Offices of David J. Stern, P.A., to the best of our knowledge and belief, is in thedirect sourcing program. However, the firm’s lead attorney, David J. Stern, pled guilty tofiling false affidavits while prosecuting foreclosures in 2002 and, further, was cited for engaging in the unlicensed practice of law and fraudulently inflating fees. [Appendix A].Please explain the process used to screen, select, and monitor firms in this program anddisclose all communications regarding the program and its handling of Mr. Stern’s lawfirm, specifically, and any other ethical issues relating to other “foreclosure mills.” Also, please disclose the direct and/or indirect involvement in the development of the directreferral program and the selection of it’s participating law firms by registered lobbyistDavid Alberto R. Cardenas, who served on the Board of Directors of Fannie Mae from1985 to 1990
and who’s law firm, Tew Cardenas, LLP has represented David J. Sternsince at least 2002, the date of the above-referenced matter. [Appendix A].Securities & Exchange Commission. Mr. Stern recently took public the “back-office” processing component of his law firm, trading under ticker “DJSP.” The prospectus of DJSP indentifies that the company’s core product, foreclosure processing, may constitutethe unlicensed practice of law but fails to disclose that its former iteration was disciplined by the Florida Bar for exactly that same infraction, nor that the discipline included aguilty plea for filing false affidavits
. Please explain why the SEC is allowing DJSPstock to continue trading given that the company failed to disclose it’s prior dealings withthe Florida Bar and continues to operate in direct violation of the findings and mandatesof the Florida Bar by processing 6,000 foreclosures per month under the names of onlyapproximately 15 attorneys. Additionally, please also disclose any enhanced duediligence steps the SEC took to protect the public from Mr. Stern, the CEO of DJSP, whohas a history of filing materially false and misleading documents in official proceedings.
http://google.brand.edgar‐online.com/displayfilinginfo.aspx?FilingID=7333260‐50390‐100834&type=sect&TabIndex=2&companyid=784122&ppu=%252fdefault.aspx%253fsym%253dDJSP, page 11