David Stern, Foreclosure King, a Deadbeat
If only David Stern were being treated as badly as he treats homeowners, this would bring real schadenfreude.
In a regulatory filing published today, Stern’s publicly traded company revealed that one of its subsidiaries failed to pay rent in November on its towering office building in Plantation, Florida, and had received a notice of default.
[snip]
Stern’s financial troubles stem from the implosion of his foreclosure empire. In the months after Mother Jones published its investigation, he’s lost clients such as Citigroup, GMAC, Wells Fargo, Fannie Mae, and Freddie Mac, and laid off nearly 450 employees. New business to his companies, he wrote in a recent letter, has declined by a staggering 90 percent in the past six months.
And it gets worse for Stern and his foreclosure operation. The same regulatory filing shows that another Stern subsidiary recently defaulted on a $15 million line of credit from Bank of America, on which the company still owes $12 million in principal.
Alas, Bank of America has given Stern another month to pay that bill (though it does sound like Stern is planning on going out of business at the end of the month, just in time for Thanksgiving).
So now, eight months after the Mortgage Bankers Association managed to negotiate a short sale of its new headquarters, the Foreclosure King is about to be foreclosed on. But both got far, far better treatment than the average homeowners who–unlike these MOTUs–had nothing to do with the crash of our economy.
I guess some deadbeats are more equal than other deadbeats.
That should be on Foreclosure Fraud gear sold at FDL.
Actually, I almost didn’t use that line, since I think the word Deadbeat still invokes the classism and racism mobilized against those in foreclosure in the first place.
You make a very good point. Wonder if there is another way of stating your point that would be a 1-2 punch?
Hey, if Citizens United makes it clear a corp is an individual, bring on the corporate bankruptcy laws for the womb-begotten-citizen.
Slightly OT: as I was thumbing through the want ads and looked at one of the many “Notices of Mortgagee’s Non-judicial Foreclosure Under Power of Sale” items [probably the only advertising that keeps our local rag afloat], I happened to note the following language:
Well hell, I think I’ll just stroll down to the courthouse and sell a few properties to which I have neither title nor possession.
What nimrod would buy this crap?
Fannie. Freddie. TARP.
Boxturtle (heck, there’s three buyers. Let’s auction and see if we get a bidding war!)
Slapping head.
Yup, and via Fannie, Freddie and TARP —> the US taxpayers.
Every MBS peddler I can think of, for starters :)
I continue to wonder about the “WHERE IS” [caps in the original notice in the paper] portion.
I mean, could someone be selling something that’s not where it “is”? If not, where would it “be”?
The mind boggles at the possibilities.
But better not to think too hard: the MOTUs will figures out a way to securitize and sell it.
I wonder what would happen if someone showed up down at the court house and asked to see the documents, if any, prior to the sale.
Sounds almost like boilerplate, really. And if the foreclosed-on house had slid off its foundations, or the previous owner had started to move it (and I don’t now but what mobile homes can be foreclosed on), then ‘where is’ might be literally true.
Even money says that whomever holds the mortgage for the property can’t find the note.
And given the general confusion, it wouldn’t shock me if the mortgage holder hired Stern’s firm to handle the foreclosure.
Boxturtle (And given Stern’s current financial situtation, I’d bet he takes the case)
Foreclosure operations don’t need all that staff now. Someone disclosed on another Wheel House thread today that one foreclosure operation has automated the robo-signing process with computers (sorry, no link). I wonder what’s in store for the guy whose name is being used?
Bob in AZ
Hopefully, prison time. This can’t be legal, can it? Isn’t the signer guaranteeing personal knowledge of the situation and the legality of the proceedings?
I thought DJSP Enterprises, the arm that prepares the documents that are signed at the law office, was sold to a Chinese company. I believe this is the unit that has defaulted on the $!2M BAC loan. The linked article is confusing to me, so I may be wrong, but it looks like Stern foresaw a problem and tried to make money off of spinning off DJSP Enterprises before fleeing the sinking ship.
Bryan Bly testified that his signature is sometimes electronically inserted into documents, by his employer, Nationwide Title Clearing.
Yeah, Bly’s the guy. Anyone want to place bets on who goes to jail first, Bly or his bosses?
Bob in AZ
I’ll bet neither. Not sure you can carge Bly without it eventually reflecting back on one or more MOTU. And if ObamaLLP was going to charge an MOTU with something, they’d have done so by now.
Boxturtle (Some whistleblower will be the first jailed)
He and his employer both had to know. Signature fonts don’t appear out of thin air.
Doesn’t have to be a signature font. If I have a document with your signature on it, I can create a graphic in about 10 seconds flat that will be indistinguishable from the original. The only catch is that it willl never vary like real signatures do.
You note:
But both got far, far better treatment than the average homeowners who–unlike these MOTUs–had nothing to do with the crash of our economy.
Actually, they will probably get even less consideration than theaverage homeowner nce it gets to foreclosure. In many, if not most, states there is a significant distinction in the way foreclosures are handled for commercial properties as opposed to residential properties. In even one of the most homeowner-friendly states (where I used to practice regularly) the homeowner in foreclosure (judicial, of course) had all sorts of procedural protections, rights to redeem, rights to re-enter and so on and so forth. Last I checked, it could take a solid year for the case to get to approaching the first iteration of the sheriff’s sale, maybe even more.
By contrast, in that same state defaulting commercial property owners had, well, about as much time as it would take to open the lender’s lawyer’s computer, pull up the form order to show cause with temporary restraints and order for distraint and distress (the latter allowed the lender to seize – distrain – the personalty of the defaulting owner found in the premises and sell it at a “distress sale”), insert the names, addresses and relevant information, and walk it to the courthouse to a judge. The judge would sign it, often ex parte (so the property owner could not get the personalty into the moving van before the constable came with new locks) and the property owner would be in deep shit immediately. Avoiding the bank calling in the lawyers was the debtor’s only hope because it could happen faster than the debtor could file a bankruptcy – even just a cover sheet in an 11. Once the process gets to the lawyers, commercial property foreclosures go with lightning speed. The only things restraining the banks are the fear of being stuck with an unsalable property (esp. in a market where businesses are failing) and being stuck with an uncollectable deficiency judgment.
I have no doubt it’s at least as fast in Florida.
So, Foreclosure King Stern will try to find some way to get all the stuff out of the buildings before the lender pulls the trigger. He’ll temporize and spin and finagle and negotiate and bullshit all the while the lender will likely have someone in a van with a camera watching the building to see whether more is coming out than going in, and someone else to tail the trucks leaving. Over a million bucks involved, you do that. It’s prudent.
The Line of Credit is a different thing. I would not be surprised if the bank hadn’t required a personal guaranty at some point, though Stern may have been able to finagle out of it at some point, saying “we work together. You know my business in detail. You don’t need me to guaranty the line of credit.” But, even if he winds up on the hook personally for the whole LoC, from what I’ve read he has made for himself several times that amount and has it stashed in various locales and modes. He just won’t want to pay it.
Good thing he’s not in New Jersey. They still have debtor’s prison there, but only for frauds about to skip the state and only for men.
Delicious!
I hope his credit rating goes in the toilet.
Unsurprising. Of course, the corporate-owned rightwing media has been pumping out the crap that the “small people” are the really really REAL deadbeats, who must be beaten up on for crashing everything, certainly the MOTU are blameless innocents who got taken for a ride by all those conniving minorities & dusky folks & such. /s
I guess this could be filed under: what goes around, comes around. Sadly, I doubt that Stern will suffer anything close to what the “average small person” suffers. Alas. Would that it could be different.
Rumors of MERS legislation through Congress has popped up on C&L.
The American justice system is just like the airline industry. There’s first class, and there’s coach.
Guess which class we’re all booked on?
Karma, baby! How does it feel Mr. Stern to be so hurting after hurting so many people?
O/T
Government to compensate ex-Guantanamo Bay detainees
Around a dozen men, who accused British security forces of colluding in their torture overseas, are to get millions in compensation from the UK government.
LINK.