Attorney General Bill McCollum News Release, August 10, 2010
Media Contact: Sandi Copes
Phone: (850) 245-0150
Florida Law Firms Subpoenaed Over Foreclosure Filing Practices
TALLAHASSEE, FL – Attorney General Bill McCollum today announced his office has launched three new investigations into allegations of unfair and deceptive actions by Florida law firms handling foreclosure cases. The Attorney General’s Economic Crimes Division is investigating whether improper documentation may have been created and filed with Florida courts to speed up foreclosure processes, potentially without the knowledge or consent of the homeowners involved.
The new investigations name The Law Offices of Marshall C. Watson, P.A.; Shapiro & Fishman, LLP; and the Law Offices of David J. Stern, P.A. The law firms were hired by loan servicers to begin foreclosure proceedings when consumers were in arrears on their mortgages.
Because many mortgages have been bought and sold by different institutions multiple times, key paperwork involved in the process to obtain foreclosure judgments is often missing. On numerous occasions, allegedly fabricated documents have been presented to the courts in foreclosure actions to obtain final judgments against homeowners. Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation.
The Attorney General’s Office is also investigating whether the law firms have created affiliated companies outside the United States where the allegedly false documents are being prepared and then submitted to the law firms for use. Subpoenas have been served on each of the law firms listed above, and the investigations are ongoing.
In the suit, Trent says that Stern’s law firm generated fraudulent mortgage assignments when pursuing foreclosures, something the suit says violated the Racketeer Influenced and Corrupt Organizations Act (RICO). “There’s an intentional haze that no one can get through,” said Trent. “It’s designed to hide the fact that no one can prove who owns these mortgages.”
Because many mortgages have been bought and sold by different institutions multiple times, paperwork involved in the process to obtain foreclosure judgements is often missing. Trent said Stern’s firm overcame that obstacle by creating an assignment, which was signed by a Stern employee instead of a representative of the lender attempting to foreclose. Trent said news of the Attorney General’s investigation added legitimacy to his case.
“It’s a rotation of the snowball that will hopefully lead to the avalanche that will force wide-spread change in Florida’s foreclosure practices,” he said. The Attorney General’s office said it served subpoenas on the three firms and was also investigating whether or not the firms had created affiliated companies outside the United States where the documents were prepared.