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Saturday, March 19, 2011

Bad Lawyer Warning: Foreclosure Mill King Strategically Defaults

The notorious South Florida foreclosure law firm of David J. Stern will close at the end of March, throwing numerous foreclosure cases into absolute limbo and perhaps indicating that Stern is under federal criminal investigation.

Stern, whose eponymous law firm received the lion's share of the foreclosure work from Freddie Mac and Fannie Mae, may be facing sanctions from the Florida Bar if he does not properly seek to withdraw from the cases, according to Kimberly Miller's report in Friday's Palm Beach Post.  

As is often required under the civil procedure rules applicable in virtually all states, attorneys of record must get permission from the court to withdraw and cannot simply pull out of a case unilaterally.  The rationale for this is to protect clients  in litigation from suddenly being left without a lawyer's representation in court, and even worse, not having any notice of his or her lawyer's withdrawal. 

Stern's new "strategic default" is curious.  However, as an observer of various government investigations -- both criminal and civil -- such behavior could be taken as an indication of a serious event.  This is pure speculation, but the signs indicate at least the possibility that Stern is under federal criminal investigation.  If that is the case, Stern could be in major criminal jeopardy.  Prior civil suits have uncovered evidence pointing to prevalenFraudulent -- and criminal -- practices.  Could numerous Stern employees -- participants in nefarious activities -- be cooperating with the government in order to avoid prosecution or hope to get shorter sentences?  

Eric Dixon is a New York investigative lawyer.  His opinions here do not constitute legal advice.  Mr. Dixon is available for comment at edixon@NYBusinessCounsel.com.
 

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