Foreclosure Mill Kings Fight Back, Sue Banks
Attorney David Stern, pictured, who has been dubbed the Foreclosure Mill King, as we previously reported in "Foreclosure King Falls From Grace," is suing Federal Home Loan Mortgage Corp. and seven other mortgage lenders for around $15 million. In the March 23-filed lawsuit he says it is because the government-run mortgage company still owes him $1.3 million for his legal services, and the others owe him too.
Another Florida foreclosure mill known for its robo-signing tactics, Ben-Ezra & Katz, is being a bit more passive-aggressive.
Ben-Ezra & Katz, led by Marc Ben-Ezra, allegedly is refusing to hand over foreclosure case files that contain over $400 million worth of original notes and mortgages "without which Chase will
In Chase's 11-page lawsuit filed Friday in a federal court based in Fort Lauderdale, the bank asked for a temporary restraining order and permanent injunction ordering the firm to return the files and pay Chase an unspecified amount of damages, reported the Palm Beach Post.
"Ben-Ezra refuses to release the Chase Files because it claims that it is owed over $5 million in fees and costs," according to the lawsuit. Chase disputes the amount it owes Ben-Ezra & Katz, which laid off 236 employees on Valentine's Day and also that month filed an appeal for a case it lost on February 11.
When it comes to Stern, he filed breach of contract lawsuits in Miami-Dade and Broward counties against several mortgage lenders, including U.S. Bancorp, MetLife Bank, Space Coast Credit Union, JPMorgan Chase division Chase Home Finance LLC, Ocwen Loan Servicing, Nationstar Mortgage LLC and PNC Financial Services.
Freddie Mac and Fannie Mae, which own or guarantee more than half of the U.S. mortgage market, last year barred Stern's firm from handling their foreclosure cases after he went under investigation by the Florida attorney general's office for allegedly presenting false and misleading documents in foreclosure cases.
In another complaint Stern has against GMAC Mortgage, Stern says that the bank breached its contract with his firm by refusing to use its services after the AG investigation was announced. Stern says the loss of GMAC's business cost him $6 million.
Believe it or not, but DJSP Enterprises Inc., a spin-off foreclosure-processing business Stern runs that is being delisted from the NASDAQ stock exchange, is actually still processing some cases, according to a March 7 filing with the U.S. Securities and Exchange Commission. DJSP will stop processing them by the end of the month.
Just last May DJSP stock was trading for around $13 per share; its most recently reported stock price was 9 cents per share. Yes, indeed, how far the kings have fallen. I wonder how they are funding their lawsuits.
Sheree R. Curry, who has owned three homes, is a three-time award-winning journalist who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the Wall Street Journal, TV Week, and Fortune. She's been writing for AOL Real Estate since 2009 from a Minneapolis-area rental. She seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.
For more on mortgages and related topics see these AOL Real Estateguides:
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- How to Buy Foreclosures
- Closing Costs: How Much to Budget
- Guide to Settlement and Escrow