The man who built an empire on the state’s foreclosure misery hoisted a white flag last week, surrendering his law license in a single-sentence memo to the Florida Supreme Court.
David J. Stern, the so-called foreclosure king of Florida, decided against appealing an October report and recommendation that he be disbarred for causing “massive injury” to the state’s judicial system. The decision, and short note, were made public late Monday.
Stern’s Plantation-based firm once handled hundreds of thousands of foreclosures statewide, a bulk that a judge acting as referee for the Bar, said caused a variety of problems that included shoddy legal work and fraudulent documents.
The Florida Supreme Court must still approve the disbarment, but attorneys said it is rare for the court to go against such a recommendation.
Foreclosure defense attorneys said they are not surprised by Stern’s decision. The case against him is solid, they said, and they believe the loss of his legal license means little to a man who sold the back operations of his enterprise for $58 million in 2010.
But during a week-long hearing in October on 17 Florida Bar complaints, Stern, 53, said his business was his life and vigorously rejected any notion that he should be held accountable for actions taken by his employees.
“This is what I did,” Stern said during the Bar hearing. “It’s what I poured my heart and soul into.”
Stern’s attorney, Jeff Tew, said he had no comment when reached Monday. The disbarment recommendation also says Stern must pay $49,767 to the Florida Bar for investigating the case.
Mike Wasylik, a foreclosure defense attorney who testified in the Bar’s case against Stern, said he got off light.
“I’m glad that he chose to stop practicing because he’s tainted the profession,” Wasylik said. “He’s going into retirement with plenty of money.”
Royal Palm Beach-based attorney Tom Ice, who also testified, said the foreclosure mills processing cases for the banks have remained mostly “unscathed.”
Still, he thinks Stern’s failure sends a message that law can’t be handled in assembly-line fashion.
“I think it’s a turning point and demonstrates that this business model doesn’t work,” Ice said. “Lead attorneys need to oversee younger attorneys and help train and mentor them.”
Palm Beach County Circuit Judge Nancy Perez acted as referee in the case against Stern and made the recommendation for disbarment in a 35-page report.
“The incidents were not isolated, but rather a representation of the culture of the firm, as to the low level of competence and ethics,” Perez wrote. “(Stern) is the lawyer. It was his firm. Mr. Stern is responsible.”
Stern’s foreclosure business, which handled cases from the nation’s biggest lenders and Fannie Mae and Freddie Mac, collapsed in 2010 amid allegations that he ran a robo-signing sweatshop more concerned with speed than accuracy.
An estimated 100,000 foreclosure cases handled by his firm were abandoned when it shut its doors. Stern acknowledged during the October hearing that there are still cases stranded in the system where he is the attorney of record.