Stern's Foreclosure Mill Lays Off 300 People

Did you know that the Wall Street money pumped into David Stern’s Law Office resulted in a public company that is actively traded? Well, it is. And it isn’t doing too well lately.

Stern’s DJSP announces 300 layoffs

South Florida Business Journal – by Paul Brinkmann
Date: Monday, October 25, 2010, 10:45am EDT

Fallout from the national foreclosure crisis continues to impact companies associated with foreclosure attorney David Stern – one of the leading foreclosure attorneys in the nation.

His law firm has filed tens of thousands of cases on behalf of lenders and mortgage agencies such as Fannie Mae. The firm has been under investigation by Attorney General Bill McCollum for allegedly creating false documents in foreclosure cases.

Here’s the latest: The company that conducts support work for Stern’s law firm, Plantation-based DJSP Enterprises (NASDAQ: DJSP), now admits to about 300 layoffs since “recent developments” began.

I first reported that Stern’s law firm and affiliated companies were laying off hundreds of people on Oct. 12. At that time, Stern’s attorney, Jeffrey Tew, said there were fewer than 100 layoffs from the law firm, and they were temporary positions.

Another departure from DJSP’s board of directors was announced Monday – that of Mark P. Harmon, a Boston-based foreclosure attorney. We reported on the Oct. 19 departure of several officers and that Stern had relinquished the chairmanship of the board.

DJSP’s stock slipped briefly below the crucial $1 mark last week. The stock was up 7 cents, to $1.11, in Monday morning trading. NASDAQ’s policy allows it to delist stocks that fall below the $1 mark for 30 days.

Stern’s law firm has struggled with declining case volume since major lenders started putting a hold on foreclosure action in September, according to DJSP’s news release about the layoffs. Mortgage giants Fannie Mae, Freddie Mac and Bank of America have stopped sending cases to Stern’s firm. The public company, DJSP, is dependent on paperwork processing from Stern’s law firm.

The law firm has defended itself in court against McCollum’s subpoena, calling his investigation overly broad and illegal. But, a Broward County judge has ruled in favor of the subpoena.

In broader related news, The Wall Street Journal reported Monday that Bank of America acknowledged some minor mistakes in foreclosure files as it begins to resubmit documents in 102,000 cases. The paper also reported on its website that Federal Reserve Chairman Ben Bernanke said the agency was “seeking to determine whether systematic weaknesses are leading to improper foreclosures.”

marcus@foreclosureProSe.com

Posted in bubble, Corruption, Eviction, securities fraud |