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Lucrative Foreclosure Mills Slip the Net of The AGs – At Least in Florida: David Stern and Shapiro Walk With Millions as FL AG Says They Have No Power To Investigate

24 Oct

This has got to be the slickest s**t we’ve ever seen – in a brazen and brilliant move, the FL AG is saying that only the BAR and not he, has the power to investigate misconduct of the foreclosure mill attorney firms in FL?

REALLY?

That must be a great relief to attorneys throughout FL who MIGHT, if they were in CA find themselves being arrested and indicted for bad acts against consumers – oh but wait – that was the CONSUMER LAWYERS TRYING TO HELP.  Right. Now we get it. The attorneys representing the BANKS can only be investigated and/or reprimanded by the BAR but the ones out there busting their tails (a tiny fraction of those out there, by the way) can be JAILED by AGs for ‘taking advantage of homeowners.  What is wrong with this picture? If you can’t tell, we can’t help you.

Corruption and fraud – it’s clearly the American Way.

Foreclosure Mills in Florida Slipping the Net of Attorney General Investigation

from naked capitalism by Yves Smith

I hope readers will forgive the overweight reporting on Florida, but it is serving as a test ground for how battles over foreclosures and mortgage fraud will play out around the US. Florida is not only one of the states with the highest level of foreclosures, but it also has the most cohesive group of anti-foreclosure lawyers, as well as more intensive reporting of developments within the state, thanks to sites like 4ClosureFraud.org and ForeclosureHamlet.org. So in many respects, this conflict is more advanced in Florida than in other states.

One development which has not gotten much attention is how the local foreclosure mills, which were targeted in an investigation by the state’s Republican attorney general Bill McCollum, seem to be escaping the inquiry. Given the opportunistic timing of the launch of McCollum’s probes, and the fact that the biggest foreclosure mill operator, David Stern, promptly hired the biggest Republican fixer in the state, this outcome should not be surprising. But the investigation is being sidestepped in a very obvious manner; one would think it would have been more seemly to have it peter out, post election, when media interest would have moved on. There appears to have been more than the usual winks and nods to get this matter out of the courts and safely in the hands of the Florida Bar Association:

Letter From the Florida Bar to 6th Circuit Chief Judge Mcgrady[1]

From the Palm Beach Post (hat tip Lisa Epstein):

Florida’s attorney general has no authority to investigate or discipline one of the state’s large foreclosure law firms, a Palm Beach County judge ruled Monday.

The five-page ruling from Circuit Judge Jack S. Cox was in response to a request from the Shapiro & Fishman law firm to quash an attorney general’s subpoena for information. The attorney general’s office announced in August it was investigating Shapiro & Fishman, which has offices in Boca Raton and Tampa, as well as two other large firms that represent lenders in foreclosure hearings.

Cox said the Florida Bar, not the attorney general’s office, is responsible for investigating allegations of misconduct, including complaints that foreclosure paperwork was doctored in order to rush cases through the courts.

After Monday’s ruling, the Plantation-based firm of David J. Stern, one of the so-called “foreclosure mills” targeted by the state, filed its own motion to quash the attorney general’s subpoena in Broward County.

“The attorney general’s case is over. This is a great victory for our client,” said Shapiro & Fishman attorney Gerald Richman of Richman Greer, P.A. “This was a totally unfair and inappropriate subpoena.” …

And while attorneys general in several states have announced investigations into lenders’ faulty foreclosure documents, Florida’s attorney general’s office does not have the power to investigate banks, spokesman [for the attorney general] Ryan Wiggins said.

“I can’t believe that the jurisdiction of the attorney general cannot include law firms and individuals working within law firms who may be engaged in improper conduct,” St. Petersburg attorney Matt Weidner said about Monday’s ruling. “I cannot believe that this will be allowed to stand, considering the extent of the allegations of serious wrongdoing.”

Gee, I wonder how AGs in 11 states, including Florida, managed to get a settlement from Countrywide? Or was McCullom along for the ride and the other ten AGs did all the heavy lifting?

In case you had any doubts regarding how lucrative the foreclosure mills are, and hence their ability to buy their way out of trouble, the David Stern law operations (which include title abstract companies and other aligned businesses) earned $260 million in gross revenues in 2009.

 

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