STERN LAW FIRM MOVING OFF-SHORE

ARTICLE BY MATT WEIDNER

INFORMATION ABOUT FORECLOSURE ATTORNEY IN FLORIDA IS POWERFUL EVIDENCE
OF FORECLOSURE MONEY MOVING OFF-SHORE
Posted on June 27, 2010 by WWW.Foreclosureblues.WORDPRESS.COM
SHOCKING- MIND BLOWING INFORMATION ABOUT FORECLOSURE MILL DAVID J STERN

We have long suspected that much of the mountains of
fraudulent mortgage securitization money, including 3rd party
payments, undisclosed yield spreads, CDS profits, and finally
foreclosure proceeds has been moved STRAIGHT OFFSHORE! Evidence is
starting to come to light…
Today, June 26, 2010, 3 hours ago | Matthew D. Weidner, Esq.
The Law Offices of David Stern is probably the single busiest
foreclosure mill operating in the State of Florida. The information
quoted below comes directly from documents filed with the Securities
and Exchange Commission. I encourage everyone who practices in
foreclosure or who cares one bit about the impact foreclosures are
having on our state and our courts to read the document very carefully
and consider the implications of each of the statements.
I wish that every judge and every overworked judicial assistant and
clerk of court and struggling homeowner and reporter and concerned
citizen would read this post and the attached prospectus very
carefully. I don’t know what a “Blank Check Company” is, but I don’t
like the sounds of it. I don’t like a company incorporated in the
British Virgin Islands being responsible for taking the homes of
hundreds of thousands of my neighbors. I especially don’t like the
thought of the profits derived from taking the homes of hundreds of
thousands of my neighbors having anything to do with,
“an unidentified operating business which has its principal business
and/or material operations in China.”

David J Stern Prospectus
And now below are statements taken directly from the prospectus….read
slowly, read carefully, pray that someone in the press or regulatory
agencies or someone in power might wake up and pay attention to all of
this:
The Supreme Court of Florida has recently taken steps to insure that
proper documentation is filed in foreclosure actions, and if DJS does
not comply with the new rules and procedures the foreclosure actions
on which they are working may be dismissed, which may result in DJS
receiving fewer referrals, and, since they are our primary client,
reduced revenues for us. However, DJS may not be successful in
complying with these new rules.
Mr. Stern received a significant amount of cash consideration in
connection with the Transaction, which may reduce his incentive to
devote his full efforts to continue to develop and expand the business
of DJS and our business. Under the terms of the Acquisition Agreement,
Mr. Stern and his affiliates received approximately $58.5 million in
Initial Cash in exchange for contributing their business to DAL, plus
another approximately $88 million in the Stern Note and Post-Closing
Cash.
DJSP Enterprises, Inc. (“DJSP”, “we,” “us” or “our”) is a holding
company whose primary business operations are conducted through three
wholly owned subsidiaries, DJS Processing, LLC (“DJS LLC”),
Professional Title and Abstract Company of Florida, LLC (“PTA LLC”),
and Default Servicing, LLC (“DSI LLC”) of DAL Group LLC (“DAL”), a
company in which DJSP holds a controlling interest. DAL, through its
operating subsidiaries, provides non-legal services supporting
residential real estate foreclosure, other related legal actions and
lender owned real estate (“REO”) services, primarily in Florida.
We were incorporated in the British Virgin Islands on February 19,
2008 under the name “Chardan 2008 China Acquisition Corp.” as a blank
check company for the purpose of acquiring, engaging in a merger or
share exchange with, purchasing all or substantially all of the assets
of, or engaging in a contractual control arrangement or any other
similar transaction with an unidentified operating business which has
its principal business and/or material operations in China. When the
global financial crisis occurred soon after the completion of Chardan
2008’s initial public offering in August 2008, Chardan 2008’s
management believed that US equity markets would be less receptive to
a transaction with a Chinese company.
Revenue from foreclosure fees increased by 9% to $19.6 million during
the three month period ended March 31, 2010 as compared to $17.9
million for the same period in 2009. This increase is primarily due to
an increase in the per file fee we receive for providing such services
that became effective as of the beginning of 2010. Revenue from
closing services increased to $2.6 million during the first quarter of
2010 from $1.7 million during the first quarter of 2009, representing
an increase of 55.5%.
During the three months ended March 31, 2010, our REO liquidation
services business became an increasingly significant source of
revenue, generating approximately 5% of our total revenue during that
period. Our REO liquidation business has a sole customer through which
we generated $3.3 million in revenue for the first quarter of 2010
compared to $1.9 million in the same period last year, primarily due
to an increase in the number of REO liquidation files which grew to
1,728 files in the first quarter of 2010, an increase of 56%, from
1,111 files in the first quarter of 2009.
Net income decreased by $5.4 million, or 40.6%, to $7.9 million in the
three months ended March 31, 2010, as compared to $13.3 million in the
same period of 2009. Adjusted net income, which is a non-GAAP
financial measure discussed in more detail below, decreased by $2.2
million to $8.7 million or 21% in the three months ended March 31,
2010 as compared to $11.0 million in the three months ended March 31,
2009.
From 2006 to 2009, our foreclosure case load increased from 15,332 to 70,382.
Beginning in April, one of DJS’ largest bank clients for which we
provide mortgage foreclosure services initiated a previously
undisclosed foreclosure system conversion that has resulted in a
marked decrease in the number of foreclosure files emanating from it
nationwide. We have been advised by the bank that the system
conversion is quite extensive and affects most loan types other than
those associated with certain government sponsored entities. While DJS
is still receiving new foreclosure files from the bank for loan types
that are not affected by the conversion, the bank has advised DJS that
it does not expect to generate new foreclosure files for the affected
loan types until the conversion is complete. Due to this conversion,
we experienced a decline of approximately 1,500 new foreclosure files
in each of April and May, 2010 from this client.
During calendar years 2007, 2008 and 2009, DJS referred to us case
files totaling 61,480, 96,509 and 98,259, respectively.
The majority of file referrals to DJS come from fewer than a dozen
lenders and loan servicing firms. If DJS were to lose any of these
sources of business, in whole or in part, it would adversely affect
our financial performance.
In 2008, the top ten clients for DJS, on an aggregate basis, accounted
for 94% of its case files referred to DJS for mortgage default and
other processing services; and its largest single customer, accounted
for 21% of DJS’ total foreclosure file volumes for the same period.
Regulation of the legal profession may constrain DJS LLC’s, PTA LLC’s
and DSI LLC’s s operations, and numerous issues arising out of that
regulation, its interpretation or evolution could impair our ability
to provide professional services to customers and reduce revenues and
profitability.
Each state has laws, regulations and codes of professional
responsibility that govern the conduct and obligations of attorneys to
their clients and the courts. Adherence to those codes of professional
responsibility are a requirement to retaining a license to practice
law in the licensing jurisdiction. The boundaries of the “practice of
law,” however, can be indistinct, vary from one state to another and
are the product of complex interactions among state law, bar
association standards and constitutional law as formulated by the U.S.
Supreme Court.
State or local bar associations, state or local prosecutors or other
persons may claim that some portion of the services that DJS LLC
provides constitute the unauthorized practice of law. Any such
challenge could have a disruptive effect on our operations, including
the diversion of significant time and attention of our senior
management in order to respond. DJS LLC, PTA LLC, DSI LLC or DAL may
also incur significant expenses in connection with such a challenge,
including substantial fees for attorneys and other professional
advisors. If a challenge to the legitimacy of DJS LLC’s or another
operating subsidiary’s operations were successful, the service
operations may need to be modified in a manner that could adversely
affect our business and DAL’s revenues and profitability, DJS LLC, PTA
LLC, DSI LLC, and DAL could be subject to a range of penalties and
suffer damage to our reputation.
The Services Agreement to which DJS LLC is a party could be deemed to
be unenforceable, in whole or in part, if a court were to determine
that such agreements constitute an impermissible fee sharing
arrangement between the law firm customer and DJS LLC.
We may, from time to time, be subject to or be named as a party in
legal proceedings in the ordinary course of our mortgage default
processing business. It could incur significant legal expenses and
management’s attention may be diverted from operations in defending
against and resolving lawsuits or claims. An adverse resolution of any
future lawsuits or claims against us could result in a negative
perception of our business and cause the market price of our ordinary
shares to decline or otherwise have an adverse effect on our operating
results and growth prospects.
If “judicial” foreclosure states adopted “non-judicial” procedures for
filing foreclosures, mortgage foreclosure processing firms operating
in “judicial” states would be materially and adversely affected.
“Judicial” foreclosure states require foreclosures to follow a set of
rules, compliance with which is overseen by a judge in a court of law.
The level of processing fees associated with a foreclosure in a
judicial state is significantly greater than would be expected in a
non-judicial state. Should Florida (or another judicial state in which
we choose to operate) choose to adopt a non-judicial mortgage
foreclosure process in order to expedite the processing of
foreclosures, it would result in a substantial reduction in the
revenues derived from that jurisdiction, with an accompanying
reduction in profits.
Because the average cycle time on a foreclosure file, except cases
that are fully litigated, ranges from 220 to 240 days, with
approximately half of the revenue earned within the first month after
the referral, and the remainder near the end of the process, the
number of current referrals is an indicator of revenue levels for the
following year, with high levels of file referrals indicative of
strong revenues.
Revenues increased by $61.1 million, or 30.7%, for 2009, as compared
to 2008 primarily due to revenues from client-reimbursed costs
increasing by $46.8 million to $139.1 million in 2009, as compared to
$92.3 million in 2008 and, to a lesser extent and as discussed further
below, as a result of the increase in mortgage foreclosures related
activities in our principal market, Florida, and as a result of the
expansion of our REO business.
For 2009, we received 70,382 foreclosure files, compared to 70,328
foreclosure files received in 2008.
During 2009, DSI LLC’s REO liquidation business became an increasingly
significant source of revenue, generating approximately 9.4% of our
total revenue excluding client costs during that period, and it was a
leading cause of the increase in revenues during that period. In 2009,
we produced revenues of $11.2 million compared to revenue of $4.1
million for 2008, representing a 175% growth from the previous period.
During 2009, we generated positive operating cash flows of $48.3 million.
THAT ENDS THE QUOTED SECTION….QUESTIONS ANYONE? JUDGES? REGULATORS?
ELECTED OFFICIALS? THE FLORIDA BAR?

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