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David J. Stern & Andrew Lee Fivecoat, Florida Bar 0122068

David J. Stern & Andrew Lee Fivecoat, Florida Bar 0122068

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Published by Albertelli_Law
FORECLOSURE FRAUD IN FLORIDA & ALBERTELLI LAW
FORECLOSURE FRAUD IN FLORIDA & ALBERTELLI LAW

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Published by: Albertelli_Law on Feb 21, 2011
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08/14/2013

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FDL TVJust Say Now« Lew Previews Obama Budget CutsObama Makes Nice with the Chamber of Commerce »
David J. Stern: Bandleader for a Symphony of ForeclosureFraud
By:David DayenMonday February 7, 2011 9:56 am
 
Tweet Share8 
It’s really something that we have to get the scoop on foreclosure mill con artist David J. Stern fromthe APand notsome police blotter, but that’s life in post-rule of law America. The story provides a service, however, profiling a manwho’s really a symbol for the foreclosure fraud crisis. Stern sought to corner the market in shepherding foreclosuresthrough Florida’s courts. He saw them as a growth opportunity and he wanted to increase profits. He did so throughcutting corners along every step of the way, becoming an expert in the kind of skills needed to keep the foreclosuretrain moving – document fraud, fabrication, forgery, etc. He and his firm were very good at what they did, which wasbasically commit crimes against homeowners and state courts. And it paid off with a suite of cars, yachts, fabuloushomes and all manner of luxury goods. His possessions increased in a direct relationship to the repossessions hislaw firm were illegally pushing through the courts.AsYves Smithpoints out, the article intimates that the foreclosure mills came up with robo-signing as a cost-cuttingmeasure, and that fits with how Stern ran his business. The key for him was volume, processing as manyforeclosures as possible. So he would naturally welcome the idea of having one employee sign off on all theforeclosure documents as a dedicated job every day. This benefited the servicers as well, since they didn’t want awhole lot of scrutiny on verification and would rather the question of whether or not they own the mortgages gounexplored. Stern was the perfect role player for this era, because he was always basically a garden-variety crook:Almost from the beginning, Stern faced trouble. In 1998, he was named in a class-action lawsuitalleging that he padded fees on foreclosed homeowners. Stern settled for $2.2 million. According tolegal testimony at the time from a Fannie Mae official, Fannie was warned about troubles at the Sternfirm. But Fannie continued referring cases to Stern. Fannie Mae spokeswoman Amy Bonitatibus says,“At all times, Fannie Mae has had a reasonable expectation that our servicers and the law firms adhereto proper procedures and conduct under the law. In instances where we learn that servicers or law firmsare not adhering to our requirements or applicable law, we immediately engage and take appropriateaction, which may include termination.”Soon after, Stern was sued again, this time for sexual harassment. A former paralegal alleged thatStern created a “sexually-laden” atmosphere in which he routinely “touched and grabbed and subjectedto simulated intercourse” his employees. Stern settled that suit in 2000 for an undisclosed amount.By this time, lawyers and homeowner activists were also warning lenders, federal regulators and theFlorida Bar about Stern. In 2002, the Florida Supreme Court reprimanded Stern for submitting“potentially misleading” fee affidavits.Even a built-for-speed operation like Stern’s firm could not keep up with the volume of foreclosures. As the articleexplains, law firms typically get a flat fee per foreclosure, but must get the foreclosure done within a set time frame,usually around six months, to collect. This led to the need for a solution that streamlined the process as much aspossible.Employee depositions paint a picture of a firm under constant pressure from the banks to move faster.The longer it took to foreclose, the more money the banks stood to lose. Like so many in the industry,Stern had a strategy to cope with all the volume and velocity: robo-signing. One employee testified thatStern’s chief lieutenant, a one-time file clerk named Cheryl Samons who rose to become the firm’s chief 
2/21/2011David J. Stern: Bandleader for a Sympfiredoglake.com//david-j-stern-ban1/2
 
operating officer, signed as many as 1,000 foreclosure affidavits a day without reading a single word.The employee said Samons’ hand got so tired that she told three other employees to forge her signature. Samons also signed numerous mortgage assignments with a notary stamp that didn’t evenexist at the time of signing. Notary stamps are only valid for four years. The only way Samons couldhave signed mortgage assignments at the time they were supposedly notarized was if she had beencapable of time travel.Stern rewarded Samons with a new BMW SUV every year, paid all her bills and took care of themortgage payment on her home, according to testimony from two employees. Samons did not respondto request for comment.The people getting foreclosed upon were an inconvenient facet of this scheme. And when Stern showed how thismodel could work, the servicers undoubtedly pressured every other firm they worked with to operate in the samefashion. This keeps fees to a minimum and benefits the servicers by giving them an out rather than modifications,which aren’t cost-effective for them.The servicer model never had to deal with a flood of delinquent loans before the popping of the housing bubble in 2006;they were too new to ever need to confront such a problem. And the resultant chaos proved that they simply could nothandle the flood without cutting corners massively and maximizing profits through forms of abuse like illegal feeincreases. The foreclosure mills worked in concert with this.This kind of profile, quite rare for the AP, exposes the clear fraud at the heart of the mortgage servicing, modificationand foreclosure system. Stern’s company is now a penny stock, he’s being investigated by the state AttorneyGeneral and federal prosecutors, his staff has shrunk from 1,200 to 200, banks have abandoned him, and hisheadquarters is in default. He hasn’t gone to jail yet but he’s a likely candidate.However, if we are to learn anything from this episode, it’s how depressingly normal Stern’s machinations were.
2/21/2011David J. Stern: Bandleader for a Sympfiredoglake.com//david-j-stern-ban2/2
 
IN THE CIRCUIT COURT OF THE TWENTIETH JUDICIAL CIRCUITIN AND FOR COLLIER COUNTY, FLORIDA
BANKUNITED,
non-
 successor in interest 
to [
lawfully seized
] BANKUNITED, FSB., purported
 plaintiff(s)
,vs.
DISPOSED CASE NO.: 09-6016-CA
 JENNIFER FRANKLIN-PRESCOTT,
et al 
., purported
defendants
. _________________________________________________________________________/
 
CANCELLATION OF HEARING UNDER COURT’S
 POLICIES & PROCEDURES 
 IN DISPOSED CASE (NOTICE)EMERGENCY WRITTEN DEMAND TO CANCEL
 HEARING 
IN DISPOSED CASEAS REQUIRED UNDER THE
 RULES & PROCEDURES 
 FROM
: Jennifer Franklin-Prescott, “
 BankUnited 
” fraud victim
CERTIFIED DELIVERIESThe Honorable Daniel R. Monaco
The Hon. Hugh D. Hayes, “
 Disposition Judge
Circuit Court Judges, Twentieth Judicial CircuitJudicial Assistants Karen / JanCollier County Government Complex3301 Tamiami Trail East Naples, Florida 34112Phone: 239.774.8118; 239.252.8119;
Fax
:
239.252.8870
; 239.775.5538; 239.774.9654; 239-252-8020
Email:dmonaco@ca.cjis20.org
,
 jmetcalfe@ca.cjis20.org,hhayes@ca.cjis20.org
 
RE:CANCELLATION
of unlawful
hearing 
in
disposed
wrongful foreclosure case
09-6016-CA
 BANKUNITED
” v. FRANKLIN-PRESCOTT, JENNIFER 
DISPOSED
CASE NO. 09-6016-CA;
DISPOSITION
JUDGE HAYES, HUGH D.UNAUTHORIZED “
02/22/11 HEARING
” [AMENDED TO 02/14/11 & CANCELLED]
 
08/12/2010 DISPOSITION FOR LACK OF “
 BANKUNITED’S 
 STANDING 
 
1.
 Disposition Judge
” Hayes had
disposed
of this prima facie
frivolous
action on
08/12/2010
 for 
record
 
lack 
of any “
 BankUnited 
 standing 
and
interest 
.
 
 BANKUNITED
” WAS NOT
 ENTITLED
TO ANY
 HEARING 
 

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