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Collapse of David J. Stern law firm throws foreclosure courts into disarray - St. Petersburg Times

Collapse of David J. Stern law firm throws foreclosure courts into disarray

By Susan Taylor Martin, Times Senior Correspondent
In Print: Wednesday, March 9, 2011

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Attorney David J. Stern, whose law firm was once known as Florida’s top foreclosure “mill,” owns this $16 million Fort Lauderdale home. Now, as Stern himself faces financial difficulties, some of his property and other assets are up for sale.
	[Broward County Property Appraiser]

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As many as 20,000 foreclosure cases in the Tampa Bay area have been left in limbo by the virtual collapse of the David J. Stern Law Firm, once Florida's most prolific foreclosure "mill.''

The firm's implosion gives many borrowers at least a temporary reprieve from foreclosure and means that thousands of cases could be dismissed unless lenders quickly hire other attorneys.

"It's a mess,'' Pinellas-Pasco Chief Judge Thomas McGrady said Tuesday.

In a letter dated March 4, Stern notified McGrady and other chief judges that as of March 31 the firm will end its involvement in all 100,000 foreclosure cases statewide in which it is still listed as attorney of record. Bank of America and other Stern clients jettisoned the firm last year because of its allegedly sloppy, fraudulent practices, but in many cases have yet to hire anyone to replace him.

"It's just put the brakes on being able to move forward in these thousands of cases we have, and so they either get counsel or get rid of the case,'' McGrady said.

In his letter to the judges, Stern acknowledged that his firm is basically out of business.

"We have been forced to drastically reduce our attorney and paralegal staff to the point where we no longer have the financial or personnel resources to continue to file motions to withdraw in the tens of thousand of cases that we still remain as counsel of record,'' he wrote. "Therefore it is with great regret that we will be ceasing the servicing of clients'' by month's end.

Attached to each letter was a list of Stern cases in that particular judicial circuit. In Pinellas-Pasco, the list is 251 pages with a total of about 10,000 cases — a third of all pending foreclosures.