Layoffs at Stern foreclosure law firm; will election influence state investigation?
Wake up and good morning. Here's the start of Thursday morning's emailed memo issued by the Plantation, Fla.-based foreclosure law firm of David J. Stern announcing the latest round of about 560 layoffs in the wake of mortgage giants Fannie Mae and Freddie Mac descending on the Stern offices to remove their case files and cut ties with the firm. Stern was once the 9th largest Broward County employer with 1,600 employees.
The memo, which the South Florida Sun Sentinel shows here in its entirety, begins like this:
As you are likely aware, recent turbulence in the mortgage industry has had a profound impact on our business. The referral of new business has decreased by over 90 percent in the last six months. This week Fannie Mae and Freddie Mac announced that they will no longer be utilizing our services. While we are doing everything possible to guide the company successfully through these difficult times, these developments mandate that we take immediate action to align the business with current realities.
It is with a heavy heart that I must announce that due to the loss in business, we regret to inform you that we are laying-off roughly 70% of our staff across the company and you have been selected to be part of the cutbacks....
Oh yeah. The email was time-stamped 10:30 a.m. and the memo says Stern employee badges would be deactivated by 11:30 a.m.
It's one more sign that Florida's so-called foreclosure mills, law firms that mass produce foreclosure documents for bank clients to enable seizure of homes behind on mortgage payments, are suffering a backlash for improper work. Stern was the heavyweight of the foreclosure mills, but the law firm and three others remain under investigation by the Florida Attorney General for allegedly fabricating and/or presenting false and misleading documents in foreclosure cases. Among those four is Tampa's Florida Default Group.
Florida Attorney General Bill McCollum will leave office at the end of this year and will be succeeded by newly elected Pam Bondi, a Republican who has been a frequent legal analyst for Fox News, A New York Times story on Nov. 3 notes Florida defense lawyers are hopeful but are not sure if Bondi is motivated to continue the inquiry into foreclosure mills. As St. Petersburg defense attorney Matthew Weidner tells the New York Times: "Bondi’s election presents the possibility for continuation of the aggressive stance taken by McCollum." But the same story adds: "How better to reward the law firms that supported her, he asked, than to end the foreclosure mills and allow new firms to represent the banks in court?"
Bondi's campaign web site mentions mortgage fraud committed by scam artists but, the story says, does not address the controversy over foreclosure documentation roiling the courts in Florida.
So, will Bondi prove to be the key to Florida's foreclosure mill fiasco?
-- Robert Trigaux, Times Business Columnist