You are on page 1of 1
AIO FROM PAGE A7 FRIDAY. JULY 30,2010 — DAILY BUSINESS REVIEW: --- An ALM Publication STERN: Suit challenges legal methods firms use to foreclose for lenders gage reinstatement letters Hetween January 2003 and February 2009 could as mem bers of the elass. While the mostrecent com- plaint targets Stern and his Plantation firm, it also chal- lenges the legality ofa practice used by many law firms that have churned out hundreds of thousands of foreclosure ceases on behalf of bank cli ents since the economic crisis started three years ago, “I hope and believe that this action will spawn some other type of actions or will be amended so that the ul- timate result will be that the foreclosure litigation indus- try, as we know it in Florida, is shut down,” Trent said, Trent's client is Ignacio Damian Figueroa of Oakland Park. In the lawsuit, Trent said Stern’s firm engaged in “a pattern of racketeering activity.” including “mail or Wire fraud.” “What 1 am ultimately trying to accomplish is that ‘people will no longer be fore- closed upon by plaintiffs who don't have any right to fore- close,” Trent said, The complaint also named the Mortgage _ Electronic Rogistration Service Corp., or MERS, as co-defendant. MERS is an electronic mortgage registration sys- tem created by major US. banks in 1995 to track ser- vicing rights and ownership of mortgage loans in the Us. ‘MERS is considered the mortgagee of record as a mortgage travels through the banking system. When the note goes into default, ‘MERS assigns the mortgage towhomever owns the debt to fle a foreclosure action against the borrower. Trent's lawsuit claims MERS was created to hide the true ownership of mort- gages, which were often Te-packaged as bonds and sold to investors. “IMERS is] a truly effec- tive smokescreen, which has lf the publi and most of the judiciary operating in the dark through the pres- ent time,” according to the complaint. ‘Morgan Lewis & Bockius attorney Robert Brochin, who represents MERS, said the complaint lacks “any merit.” He declined further comment, The suit claims that as- signment of mortgages from MERS to Stern's plaintiff — including some ofthe nation’s largest financial institutions — are often “fraudulent” be- cause they were signed by Stern employees on behalf of MERS. Stern's employ- ees had MERS’ authoriza~ tion to sign the assignment. Still, Trent said MERS has no ower to assign a mortgage that it doesn't own MELANIEBELL Fort Lauderdale solo practitioner Kenneth Eric Trent filed the lawsuit and s seeking dass action status, “Just like MERS, the as- signments were meaningless shells” according to the law- suit Some judges across Florida, one of the states with the highest number of fore- closures, “have questioned the validity of assignments of ‘mortgages in cases brought to court on behalfof Stern clients and the clionts of other firms specializing in foreclosure ac- tions. In March,: Pasco Circuit Judge Lynn Tepper threw out {8 case over an. assignment that an employee of Stems aw firm “fraudulently backdat- ed” to “mislead the defense and the court,” according to ‘Tepper’s ruling Last year, foreclosure de- fense lawyer Tom Ice of West Palm Beach compiled 21 assignments of mort- ‘gages that he asserted had en backdated by Stern’s stafl At a May 2009 deposi- tion, inacase unrelated to the ‘most recent suit — Iee con- fronted: Stern's operations ‘manager, Cheryl Samons, with the assignments, some of which she had signed, “If you just look at the document ‘itself, you will see that the expiration date [of the notary seal is more than four years after the ex- ecution date,” he said, add- ing that notary seals expire every four years. “Unless they are capable of time travel, [Stern employees} couldn't have used that stamp that wasn't going to be issued until after this document was executed” In her response, Samons attributed the backdating to “sloppiness.” ‘The accuracy of court doc- uments filed by foreclosure law firms hasbeen ques- tioned before In May, the Florida at- torney general launched an investigation over allegations Tampa-based Florida Default Law Group falsified legal doc- uments 10 expedite foreclo- sure cases filed by its lender clients. That investigation is pending. canbe Paola luspa-Abbott reached at (305) 347-6657. DJSP ACQUIRES TITLE INSURANCE, ‘SETTLEMENT COMPANY Plantation-based DJSP Enterprises, found- ed by foreclosure attomey David . Stem, has acquired Timios,a national ttle insur- ance and settlement services company. The deal closed Tuesday, three months after it was announced by Stern, DISP Enterprises chairman and chief executive officer. “Completion of this acquisition repre- sents a significant step forward in our quest ‘tobbecome the leading cyclical provider of products and services to the mortgage and teal estate industries," Stern said in astate- ment. In April, DISP executives said they planned to buy the Westlake Village, alifornia-based company for $1.5 million ‘in cash, 200,000 shares of DISP and up to 100,000 more shares of DISP depending on "the financial performance of the company. JSP began trading on the NASDAQ Global Market in January and closed. ‘Thursday at $3.86. The stock has traded from $3.77 10 $13.65 a share. Timios will help DISP complete title ‘searches for its growing bank-owned prop- erty liquidation and loss mitigation busl- ness outside of Florida. JSP is one of the nation’s largest provid- £15 of processing services for the mortgage and real estate industries. It provides ser- vices on mortgages, mortgage defaults, title searches, bank-owned properties, oan ‘modifications tile insurance, loss mitiga- tion and bankruptcy. ‘The firm's principal customer is the Law_ Offices of David J. Stern, whose clients in- clude many of the top mortgage servicers in the country. DISP currently has 1,200 ‘employees, up from about 1,000 in January. (Paola luspa-Abbott)

You might also like