Stern Lays off 155 People

Another 155 employees received pink slips Thursday from the Law Offices of David J. Stern and DJSP Enterprises, which processes home foreclosure cases for the Plantation-based law firm.


The layoffs came as Fannie Mae, which withdrew it business from the Stern firm after becoming one of its biggest clients, announced it had named eight law firms to handle foreclosure cases in Florida.

DJSP and the Stern law firm laid off 155 employees Thursday morning. A DJSP spokesman said the company has no intention of closing.

The layoffs and new law firm appointments came on the heels of an investigation by Florida Attorney General Bill McCollum into consumer and defense lawyer complaints of improper document filings with the courts by four law firms including Stern's. McCollum's office issued broad subpoenas for law firm files several months ago.

Following announcement of the subpoenas, Fannie Mae and Freddie Mac — one of Stern's biggest clients — severed ties with the firm.

The lawyers or firms that will now handle Fannie Mae foreclosures in Florida are: Albertelli Law, Jacksonville; Douglas C. Zahm, St. Petersburg; Kahane & Associates, Plantation; Smith Greenspoon Marder, Fort Lauderdale; the Law Offices of Daniel Consuegra, Tampa; Tripp Scott, Fort Lauderdale; Van Ness Law Firm, Deerfield Beach; and Elizabeth Wellborn of Deerfield Beach.

In the first nine months of 2010 Fannie Mae acquired 25,316 properties through foreclosure in Florida.

DJSP, a public company, was spun off by the Stern law firm in January. The company and the law firm are headquartered in the same Plantation office building and share many workers. Foreclosure attorney David J. Stern heads both businesses.

The latest round of layoffs — which included lawyers and support staff — reduces the total number of workers at the Plantation firm and DJSP to 300. That's down from a year ago, when more than 1,200 employees worked for the two businesses.

"We performed another round of layoffs this morning," said Chris Simmons, director of investor relations and human resources for DJSP Enterprises.

Simmons and Stern's lawyer, Jeffrey Tew of Tew Cardenas in Miami, insist the law firm and the foreclosure processing company are not closing.

"We are not shutting down," Simmons said. "We are working hard to keep the company running."

Local headhunters say they are being inundated with resumes of attorneys from the Stern firm.

DJSP this week announced it had defaulted on a $12 million line of credit with Bank of America and was working with the bank to reach an agreement.

"We are not shutting down. We are working hard to keep the company running."Chris Simmonsdirector of investor relations, human resourcesDJSP Enterprises

Julie Kay can be reached at (305) 347-6685.

http://www.dailybusinessreview.com/PubArticleDBR.jsp?id=1202475092847&hbxlogin=1

MERS

MERS itself has only 50 employees and they are not involved in signing mortgage assignments to trusts. These servicing company employees sign as officers of MERS “as nominee for” a particular mortgage company or bank. They are not employees of the mortgage companies or employees of the original named lender, but their titles on the Mortgage Assignment belie this and typically read: “Linda Green, Vice President, Mortgage Electronic Registration Systems, Inc., as nominee for American Brokers Conduit.”




MERS president R.K. Arnold testified in Senate testimony earlier this week that there are over 20,000 MERS “certifying officers.” To become a MERS certifying officer, a mortgage servicing company employee need only complete an online form and pay $25.00. Because of the concealment of the actual employer on the Mortgage Assignments, it is easy enough for Courts, and homeowners, to believe that they are examining a document prepared by the lender that sold the mortgage to the trust, when, in fact, the signer was a servicing company clerk paid by the trust itself.



The representative of the GRANTOR is, in truth, a paid employee of the GRANTEE. In hundreds of thousands of cases, the authority is, therefore, misrepresented. It is now also coming to light that in tens of thousands of cases, the individuals signing these forms did not even sign their own names. The documents were made to look official because other mortgage servicing company employees signed as witnesses and then all four “signatures” were notarized by yet another mortgage servicing company employee. The titles were false, the signatures were forged, the “witnessing” was a lie, as was the notarization. Despite all of these false statements, the BIGGEST LIE on these documents is that the trust acquired the mortgage on the date stated plainly on the Mortgage Assignment. In truth, no such transfers ever took place as represented by these MERS certifying officers (or their stand-in forgers). The date chosen almost always corresponds not to an actual transfer, but to the date roughly corresponding to the time the loan went into default. The Mortgage Assignment was prepared only to provide “proof” that the trust owned the mortgage. Until courts require Trusts to come forward with actual proof that they acquired the mortgages in question, specifying whom they paid and how much they paid for each such trust-owned mortgage, the actual owner of these mortgages will never be known.

http://stopforeclosurefraud.com/2010/11/18/false-statements-r-k-arnold-mortgage-electronic-registration-systems/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ForeclosureFraudByDinsfla+%28FORECLOSURE+FRAUD+%7C+by+DinSFLA%29

We all know the mortgage securitization process is complicated. But just how complicated?

http://www.huffingtonpost.com/2010/11/16/mortgage-security-chart_n_784274.html?view=screen

STERN FIRM FIRED BY FANNIE & FREDDIE

Freddie Mac announced Tuesday that it has terminated its relationship with the law offices of David J. Stern, P.A. in Plantation, Florida. Fannie Mae, too, says it has suspended business with the so-called Florida “foreclosure mill.”


The Stern law firm is one of the largest in the state, processing thousands of cases a month, and had been retained by both Fannie and Freddie as a preferred legal counsel for its servicers to go to for pending foreclosures and home repossessions.

But the firm and its namesake attorney have been the focus of high-profile investigations by both the Florida attorney general and the Florida Bar Association for allegedly falsifying legal documents and misleading the courts in numerous foreclosure cases.

The GSEs are no longer referring new cases to the David Stern law offices and have instructed the firm and its attorneys to stop processing all Florida foreclosure and bankruptcy matters related to Fannie Mae or Freddie Mac mortgages.

Freddie clearly stated in its notice issued Tuesday, “Servicers may not refer any Freddie Mac foreclosure or bankruptcy cases to the Law Offices of David J. Stern, P.A., whether referred within or outside Freddie Mac’s Designated Counsel Program.”

The GSE continued, “It is critically important to Freddie Mac that the legal rights of borrowers and the integrity of the foreclosure process are protected and that our servicers fully comply with applicable law and Freddie Mac’s servicing requirements. Freddie Mac continually monitors the participants in our Designated Counsel Program for compliance with Freddie Mac guidelines.”

The David Stern law offices have been removed from both Freddie Mac’s list of approved legal counsel and Fannie Mae’s retained attorney network. There are currently four Florida firms listed as designated counsel for Freddie, and eight firms on Fannie’s list.

Freddie says it is in the process of identifying law firms to which it will transfer cases from the law offices of David Stern. According to a report from the Palm Beach Post, Fannie Mae has already sent retention letters to nine other firms in Florida.

https://www.efanniemae.com/sf/technology/servinvreport/amn/pdf/retainedattorneylist.pdf
 
Thanks DS NEWS

States, Mortgage Lenders in Talks over Fund for Borrowers in Foreclosure Mess

State attorneys general and the country's biggest lenders are negotiating to create a nationwide fund to compensate borrowers who can prove they lost their home in an improper foreclosure, the Washington Post reported today. Discussions are continuing over the size of the fund, who would administer it and what kind of proof homeowners would have to present to get access to the money. However, there is a consensus between the lenders and state officials that some sort of financial remedy is necessary to avoid the turmoil that could result from homeowner challenges. Any settlement between the banks and attorneys general almost certainly would force lenders to put more resources into modifying the loans of homeowners who missed their payments, rather than rushing toward foreclosures, state officials said. The banks could also be barred from foreclosing on homeowners while simultaneously negotiating mortgage modifications.

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/16/AR2010111607100.html


In related news, Senate Democrats, drawing on testimony from a leading foreclosure expert on foreclosure, yesterday charged that the nation?s biggest banks appeared to have big financial reasons for moving at a snail's pace to modify mortgages of homeowners facing foreclosure, CongressDaily reported today. Sen. Tim Johnson (D-S.D.) who is in line to chair the committee in the next Congress, said that he had "serious concerns" that banks have been unwilling to offer more generous concessions on the first loans of troubled borrowers because they were afraid of taking big losses on their massive portfolios of second mortgages. Prof. Adam Levitin of Georgetown University Law Center testified before the Senate Banking Committee that the four biggest banks had more than $400 billion in second liens - roughly equal to their collective market capitalization. The banks carry those second mortgages and home-equity loans on their own books, and would be forced to take immediate losses if they were modified. "If they start writing off their second lien mortgages, they would have no capital. They would be insolvent," Levitin said. "That creates a strong incentive not to recognize losses and just try to pretend it is not there," Levitin said. Bank of America and Chase executives staunchly disputed Levitin's allegations, saying that second liens play no role in their decisions to modify first mortgages.

House to Consider Override of Notary-Bill Veto

House lawmakers are scheduled to consider today a motion to override President Barack Obama's veto last month of a bill that critics claimed could make it harder for homeowners to stop flawed foreclosures, the Wall Street Journal reported today. The vetoed bill, sponsored by Rep. Robert Aderholt (R-Ala.), would require notarizations of mortgages and other documents, including those done electronically, that are done in one U.S. state to be accepted by courts in another state. The House approved the bill in April by a voice vote, and the Senate passed it unanimously in late September. President Obama, however, returned the bill to Congress without his signature last month as concerns mounted over the unintended impact that the measure could have on consumer protections amid growing problems with foreclosure documentation. Critics have said the bill would make it easier for lenders to speed up the foreclosure process. Aderholt has rejected any link between document-handling problems and the bill, titled the "Interstate Recognition of Notarizations Act of 2010."

NY- Judge Schack names Robo- Signers in Cases

ROSA C. LARA

WM SPECIALTY MORTGAGE LLC, v. GRANT

TAMARA PRICE
DEUTSCHE BANK NATIONA L TRUST COMPANY, v. EZAGUI
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. CLOUDEN

CHRISTOPHER M. ZEIS
PROPERTY ASSET MANAGEMENT, INC., v. THEODORE

JOHN SHELLEY
U.S. BANK NATIONAL ASSOCIATION, v. LOUIS

ELY HARLESS
BANK OF NEW YORK v. MULLIGAN
DEUTSCHE BANK NATIONAL TRUST, v. AUGUSTE

JEFF RIVAS
DEUTSCHE BANK NATIONAL TRUST COMPANY v. CASTELLANOS

NICOLE GAZZO ESQ., Attorney of STEVEN J. BAUM PC/ CATHY MENCHISE
HSBC BANK USA, N.A., v. YEASMIN


CATHY MENCHISE
U.S. BANK NATIONAL ASSOCIATION, v. MAYNARD

BRYAN KUSICH
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. HENRY
WELLS FARGO BANK, N.A., v. GUY
U.S. BANK, NATIONAL ASSOCIATION, v. VIDEJUS

MARGERY ROTUNDO / SCOTT ANDERSON
HSBC BANK USA, N.A.,v. CHARLEVAGNE
NOMURA CREDIT & CAPITAL,, INC.,v. WASHINGTON

SCOTT ANDERSON / JESSICA DYBAS
HSBC BANK USA, N.A., v. BETTS


SCOTT ANDERSON
HSBC BANK USA, NATIONAL ASSOCIATION,, v. ANTROBUS


ALBERT FIORELLO
NYCTL 1998-1 TRUST AND THE BANK OF NEW, v. CRUZ


VICTOR F. PARISI
HSBC BANK USA, NATIONAL ASSOCIATION, v. PERBOO


LEO S. ORTEGA, Jr.
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. GRANT


KERI SELMAN
BANK OF NEW YORK v. OROSCO


JOE LANNING
U.S. BANK NATIONAL ASSOCIATION, v. GRANT


CHINA BROWN
GE CAPITAL MORTGAGE SERVICES, INC., v. POWELL


ERICA JOHNSON SECK
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. MARAJ
DEUTSCHE BANK NATIONAL TRUST COMPANY, v. HARRIS
ONEWEST BANK v. DRAYTON

http://stopforeclosurefraud.com/2010/11/16/mind-blowing-judge-schack-names-robo-signers-in-many-foreclosure-cases-greatest-hits/
 
 

Ginnie Mae OK's FHA Short Refis

Ginnie Mae has announced that it will allow issuers to pool Federal Housing Administration (FHA) short-refinance loans in Ginnie Mae single-family fixed-rate or adjustable-rate mortgage pools. The loans must meet the criteria for certain FHA Automated Data Processing codes, which Ginnie Mae outlines in its Nov. 8 memorandum.





The short-refi program, which the FHA rolled out in September, is aimed at borrowers who are underwater but current on their mortgages. To Vicki Bott, the FHA's director of single-family programs, the short refi's ability to be sold into a typical Ginnie Mae pool represents one of the program's improvements over the agency's previous efforts to help borrowers regain equity in their homes, such as Hope for Homeowners.




"We do believe a short-refi is more simplistic and from a secondary market standpoint," Bott told Servicing Management. "They're TBA-eligible, and so the pricing to the consumer should be lower."



SOURCE: Ginnie Mae

Fannie Mae, Freddie Mac, and FHA currently account for more than 90 percent of the mortgage market.

Fannie Mae, Freddie Mac, and FHA currently account for more than 90 percent of the mortgage market.


NAR says lenders refuse to make loans unless FHA will insure them or the GSEs will buy them. However stricter underwriting rules from the government agencies eliminate many buyers with credit scores as high as 750, and lenders are imposing credit overlays of their own, restricting the availability of credit, according to the trade group.

Medium US Home Price is $177,000

Prices of single-family homes rose an average of 3.6 percent during the second quarter of 2010 compared to a year earlier nationally, according to the Fiserv Case-Shiller Indexes. As of the end of June, the median U.S. home price was $177,000, as tracked by Fiserv.

Congress Runs Up against Deadline over Unemployment Benefits

Though there are many issues swirling as the lame duck session kicks off, Congress will have to negotiate the federal unemployment insurance benefits for millions that are set to expire on Nov. 30, CongressDaily reported today. Nearly 2 million of the 5 million people now on federal support will immediately lose benefits if Congress does not act by December. 1, according to the National Employment Law Project. The other 3 million would gradually lose benefits over the following few months as they used up the remainder of their benefits. The benefits cost between $6-7 billion per month, according to estimates compiled by the Center on Budget and Policy Priorities. Extending them for one year would cost about $80 billion, the Center estimates, noting that there is no official figure for the cost of their extension.

Washington Weighs Trimming Mortgage Interest Tax Deduction

The co-chairs of the National Commission on Fiscal Responsibility and Reform, Alan Simpson, a former Republican senator from Wyoming, and Erskine Bowles, who served as chief of staff under President Clinton, have outlined several recommendations in a proposal to President Obama.


http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/CoChair_Draft.pdf

Their first option would reduce the amount of mortgage interest payments homeowners can deduct from their federal taxes by 20 percent. Option two would limit the mortgage deduction to exclude second residences, home equity loans, and mortgages over $500,000.

It requires approval from 14 of the 18 members of the commission in order to make it to Congress for consideration. The commission says it plans to submit its final recommendations to lawmakers by December 1.

Contact your Congressman and tell him to vote HELL NO!

Obama to Nominate North Carolina Regulator for Fannie Mae, Freddie Mac Overseer

President Barack Obama will nominate North Carolina Banking Commissioner Joseph A. Smith Jr. to be chief regulator for Fannie Mae and Freddie Mac as the administration prepares to overhaul the mortgage firms, Bloomberg News reported yesterday. Smith will be named as soon as today as Obama's choice to become director of the Federal Housing Finance Agency. The agency has overseen the two companies since they were seized by regulators in September 2008. If confirmed by the Senate, Smith would replace acting FHFA director Edward J. DeMarco in a post that would also place him in charge of the nation's 12 Federal Home Loan Banks

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/12/AR2010111201641.html

Foreclosure Mess Prompts Growing Number of Public Officials to Slow Down Process

Frustrated by the banks' response to the foreclosure mess, a growing number of public officials - including chief judges, attorneys general and sheriffs from jurisdictions big and small - are pushing the boundaries of their powers to slow down foreclosures in their areas, the Washington Post reported today. The new challenges are throwing a wrench into the plans of mortgage companies, which in recent weeks have tried to put the robo-signing mess behind them by rapidly reviewing or fixing their paperwork and resuming foreclosures. Such challenges, experts say, are likely to further prolong a foreclosure process that already takes an average of 16 months to complete - helping homeowners facing eviction but hurting the still-fragile housing market.

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/11/AR2010111107518.html

Are You Up To Speed On The New Regulations?

Are You Up To Speed On The New Regulations?


in From The Orb > Required Reading

by Sue Sroka on Wednesday 10 November 2010

REQUIRED READING: Did you know that earlier this year, a mortgage banker made a $1.25 million settlement with the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) following an examination of compliance with federal and state consumer protection laws? Not keeping up with regulatory changes can put a deep dent in your reputation - if not put you completely out of business!

Loans that hit your desk with regulatory issues, incomplete packages and erroneous pricing are unacceptable in today’s environment. Now, more than ever, it is crucial to understand exactly what is happening from the time an application is taken, through underwriting, pre-funding quality control and closing. Additionally, you need to question how your staff operates - and if anyone on your staff explains their actions by saying, "Because we have always done it this way," you should toss out the yellow flag while shouting "Foul!" at the top of your lungs.

Admittedly, there has been an avalanche of new regulations and requirements coming from federal and state levels. Many mortgage banking executives are struggling to get their employees to think differently about the lending process and to embrace change. This can be difficult, because many executive themselves do not quite understand what needs to change.

If any of this sounds familiar, it is an excellent idea to immediately update your written corporate policies and prepare for resistance. This will help clarify any ambiguous issues and force you to re-evaluate how your operation should be working.

Then, check the technology that you are leveraging to ensure that it is configured to support your policies. Many systems available today are highly configurable, but lenders need to invest some time to actually configure them. This may sound strange, but there are still too many lenders who are in the market for a new technical "miracle solution," - when, in fact, the product they already have installed just needs to be configured to meet their current business needs.

In this area, it is important to work with your lending system vendor. Any vendor worth its salt is eager to give guidance that will benefit its clients' secondary operations. Then, make sure that you invest the time to train your staff - this should be a key component of any risk-management strategy.

The acronym parade

The key areas that need to be updated in your policy documents include the Home Valuation Code of Conduct (HVCC), the Real Estate Settlement Procedures Act (RESPA), the Mortgage Disclosure Improvement Act (MDIA) and the state examinations.

People have been grumbling about HVCC rules for more than a year. Now, the Subtitle F of the Mortgage Reform Act (Title XIV of the act) addresses appraisal activities, with new rules that have provisions to abolish HVCC with a new interim final regulation. Having your current procedures clearly documented will make it easier for you to adjust quickly to the new rulings going into effect shortly.

As for RESPA, those regulatory changes have been the bane of our industry this year. One of the key elements driving lenders crazy is the conflicting information we have been receiving from various regulatory agencies. There is also the matter of the vague language within RESPA that is left up to interpretation.

Regarding RESPA, it is vital to determine if your technology can easily support your workflow. In some automated solutions, there are alerts that notifies you if closing dates are outside of the regulatory requirements. If your platform does not support this type of functionality, how clearly have you documented your manual work-around processes so that new hires will be doing their job without putting your company at compliance risk?

MDIA is another regulatory change that has most certainly had an impact on your internal processes. At one time, it was a mild and mostly benign inconvenience - but borrower disclosures are now an integral element of a compliant loan. Not only does MDIA set new rules around the timing of when disclosures need to be sent to borrowers, but it also changes which loan programs and purposes are being regulated differently.

But that's just the federal concerns. The states are also party to this issue. If you are not up to speed on what your state regulators are demanding, you need to get cracking on that knowledge gap ASAP.

It is of no value to a lender to have originators failing their state examinations. Although these exams are expensive and tedious to manage, their quality-control measures can ultimately protect your company.

From a policies and procedures perspective, the impact of state exams should definitely change how you do business - especially if you lend in multiple states. The multistate examination process is a collaboration of two state regulators: CSBS and AARMR. Together, they have embarked upon a comprehensive initiative to modernize mortgage lending regulatory practices. Not only are they establishing consistency across all states relative to what gets looked at in an audit, but they are also sharing their findings.

Niccolo Machiavelli once wrote, "There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things." In today's evolving regulatory environment, change will not come easy or fast. However, the industry cannot procrastinate when it comes to meeting the new requirements and understanding the new guidelines. Without having the correct operations policy in place, this task will be more difficult than it needs to be.



Sue Sroka is vice president of client services for Del Mar DataTrac, based in San Diego. She can be reached at (858) 550-8810.