Florida foreclosure complaints: Foreclosure fraud complaints against law...

http://articles.sun-sentinel.com/2011-05-10/business/fl-florida-bar-forecl...

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Foreclosure fraud complaints flood Florida Bar but no lawyer reprimands so far
May 10, 2011 | By Diane C. Lade, Sun Sentinel

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Complaints about foreclosure fraud are pouring into The Florida Bar, with four times more cases pending today than six months ago, as property owners trying to save their homes increasingly take on their banks and their lenders' lawyers. The Bar, which regulates lawyer conduct in Florida and most states, has opened 202 foreclosure fraud grievance investigations since November, with 226 now pending. Such complaints target lenders' attorneys, some of whose practices process thousands of foreclosures a month.
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These practices, nicknamed "foreclosure mills," have faced accusations by homeowners and state regulators of allegedly submitting false or misleading paperwork, and having employees "robo-sign" piles of documents without verifying them.

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Broward and Palm Beach counties have among the highest metro-area foreclosure rates in the nation, with more than 100,000 homes in some stage of foreclosure last year according to Realty Trac, an online foreclosure listing firm. Questions about foreclosure-mill practices have led banks and lenders to slow the processing of foreclosure cases, which some believe has deepened South Florida's housing market woes. Yet among the 46 foreclosure fraud cases closed so far, none have resulted in any sanctions against attorneys including David J. Stern, whose Plantation operation once employed more than 1,000 people. Stern, who is the target of a civil investigation by the Florida attorney general, also has a Bar complaint against him that was opened last year. Orlando attorney Mayanne Downs, the outgoing Bar president, said the closed foreclosure fraud grievances were carefully reviewed before concluding there had been no misconduct. She said so far, the Bar has issued sanctions against 53 attorneys involved in 145 foreclosure-related cases not involving foreclosure fraud, including two disbarments for loan modification practices and 20 for mortgage fraud. Downs anticipates more disciplinary action is coming. "But processing these cases is more like running a marathon than a sprint," she said. "As it is in the justice system, the accused deserves due process." Bob Jarvis, a law professor at Nova Southeastern University, said the lack of Bar disciplinary action such as disbarments and suspensions regarding foreclosure fraud will "lend credence to those who say the Bar is incapable and someone else should regulate lawyers."

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Florida foreclosure complaints: Foreclosure fraud complaints against law...

http://articles.sun-sentinel.com/2011-05-10/business/fl-florida-bar-forecl...

Jarvis thinks the job probably should stay with an organization that does nothing but look at lawyers, as compared to having the authority go to state business and professional regulators who license everyone from contractors to hair braiders. "But the Bar should be conducting random audits, so no lawyer can feel safe," he said. DJSP Enterprises, Stern's affiliate company that handled his foreclosure processing, closed its doors earlier this year after major banks and federal mortgage guarantors severed business ties with the operation. Other lawyers who head prominent foreclosure law firms and are facing both Bar and state scrutiny include: Gerald Shapiro, Barry Fishman, Marvin E. Katz, Marc Ben-Ezra, Robert Kahane, James Albertelli, Daniel C. Consuegra and Michael Echeverria. All except Echeverria, of Tampa's Florida Default Law Group, and Albertelli and Consuegra, also in Tampa, are based in South Florida. The Attorney General's Office has closed its investigation of Fort Lauderdale attorney Marshall C. Watson, but his Bar case remains open. Last month, the 4th District Court of Appeal in West Palm Beach ruled the attorney general had no authority to investigate the Shapiro & Fishman firm, based in Boca Raton, under civil fair trade statutes.
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While mortgage fraud complaints are subsiding, there have been increases in complaints involving attorneys claiming to help homeowners. There were 134 complaints filed regarding loan modifications within the past six months, with a total of 242 pending cases, and 39 new complaints regarding foreclosure defense, with 39 pending cases. Fort Lauderdale's Thomas W. Dvorak was one of the lawyers sanctioned during this period. His license was suspended for a year for taking fees ocasionally having others collect them while he was in jail for traffic, probation and drunken driving offenses for foreclosure rescue and loan modification work but doing little or nothing in return, according to his case file. Dvorak agreed to repay 46 clients a total of $127,686. "Tom is in recovery and getting the help he needs," said his attorney, John Contini. The foreclosure crisis may be a Bar burden for a long time. Cases can take two to three years to close, as they are extremely complex and the grievance process allows for rebuttals and extensions before the Florida Supreme Court makes the final decision, said Kenneth Marvin, the Bar's director of lawyer regulation. Until that happens, an attorney remains legally licensed. "We have just started trying to get a handle on the foreclosure cases," said Marvin, whose office recently hired an additional Bar lawyer to deal exclusively with foreclosure fraud. "I can't tell you if the river has peaked but it has reached flood stage." The huge numbers of foreclosures coupled with publicity about people fighting their home repossessions is largely driving the foreclosure fraud case spike, said Gerald Richman, the attorney representing Shapiro & Fishman. "Some of the complaints may have merit, some are being used as a way to avoid foreclosure," he said. But Margery Golant, a South Florida foreclosure defense attorney, thinks the rise in Bar foreclosure grievances has mulitple sources: outright fraud, incompetent and inexperienced lawyers, and an overburdened system. "This mess is undercutting the legal system and the economy of Florida," she said. dlade@tribune.com or 954-356-4295
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