"Foreclosure King" Dethroned in Florida

The rise and fall of Florida foreclosure lawyer David Stern -- widely known as the "foreclosure king" for his role bringing thousands of cases against homeowners -- is more than just a story of greed and a system gone awry. As Abigail Field of our sister site Daily Finance explains, Stern's demise could throw the whole Florida real estate market into turmoil, as all of those "orphaned" cases remain unresolved. It's a sad and cautionary tale -- and, according to Field, may be just the tip of the state's foreclosure iceberg.

David J. Stern of the eponymous Florida law firm has seen better days. Once known as the "foreclosure king," Stern was high-flying enough to buy his employees houses and cars, while snapping up several multimillion dollar homes for himself. Now his company's stock (DJSP) trades for pennies and faces delisting; his firm faces multiple lawsuits and an ongoing investigation by the Florida attorney general's office; and his companies have lost major clients and shed hundreds of employees.

The Florida AG's investigation also includes ProVest, a firm that tells homeowners they're being foreclosed on and Stern used so heavily that it shared office space with his company. According to at least one former Stern employee, problems with giving homeowners notice of the foreclosure were rampant, and related documents were falsified.

The most recent bad news for Stern includes a Florida appellate court just ruling that one of the lawsuits against his firm can continue as a class action. That suit claims Stern told homeowners hoping to avoid foreclosure to pay inflated and improper fees, including for ProVest's serving notice of the foreclosure. A call to the firm requesting comment wasn't returned by publication time.

Read more at DailyFinance.

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