Monday, December 27, 2010

Foreclosure Follies -- Lawyer Whack a Mole?

Hi kids!

Welcome back to lawyer purgatory, that period between Christmas and New Year's where everyone pretends to be working but nothing gets scheduled and no one really does anything again until next year anyways.

Ever wonder what happened to youngin' lawyers doing foreclosure work at David Stern's shop?

The pups just moved along to another foreclosure joint:
'A game of Whac-A-Mole'

The Atlanta-based McCalla Raymer law firm, which handles foreclosures for mortgage giant Fannie Mae in Georgia, hopes to do the same in Florida. In November, as the firm began setting up shop in Orlando with 10 former Stern attorneys, disgruntled homeowners in Georgia filed a federal class-action lawsuit against the firm, claiming it used forged documents to take their homes, often while they were in the midst of modifying their loans. This month four other Georgia homeowners - who are representing themselves - have filed similar lawsuits against McCalla Raymer.

The firm initially registered to do business in Florida as McCalla Raymer Florida LLC but dissolved that firm a month later and is now registered to do business in Florida as Stone, McGehee & Silver. The firm, which hired former Fannie Mae associate general counsel and foreclosure expert Susan Reid last month, has plans to expand throughout Florida, advertising for attorneys in Tampa, Fort Lauderdale, Miami and Orlando. While at Fannie Mae, Reid worked with foreclosure attorneys in its retained attorney network, including those from Stern's office.

The Fort Lauderdale-based Law Offices of Marshall C. Watson has picked up five former Stern attorneys, while Shapiro & Fishman, with offices in Tampa and Boca Raton, has hired one. Both firms, as well as Stern's company and the Tampa-based Florida Default Law Group, are under state investigation.
Other lawyers who have left Stern's company are now earning a living at several Fannie Mae-designated foreclosure firms, such as Ben-Ezra & Katz in Fort Lauderdale and Kahane & Associates in Plantation.

"We did a thorough vetting of the Stern attorneys," said Marty Stone, a managing partner with McCalla Raymer. "I don't want to say we weren't concerned at all, but I do think there is a danger of painting with too broad of a brush."

Still, the distribution of former Stern attorneys to other firms feels like an injustice to some home­owners in foreclosure.

In sworn statements taken by the state attorney general's office, two former Stern employees - a paralegal and a legal assistant - attest to wrongdoing at the firm that included hiding problem files from federal auditors, forging signatures and making up documents as staff struggled to keep up with a mounting volume of foreclosures.

"It's like a game of Whac-A-Mole - these unethical, dangerous attorneys just pop up somewhere else," said Lisa Epstein, a home­owner advocate in Palm Beach County who runs the website Foreclosure Hamlet. "The Florida Bar has proven that they have no intention of disciplining these unprofessional attorneys."
 Hmm.  But for the necessity of having a live lawyer body at court hearings and mandatory mediation, I wonder whether this work wouldn't all be outsourced to India?

And young lawyers do need to pay for that education, but at a certain point I'd rather be flipping burgers in Boca than doing this kind of soul-sucking drudgery unrewarding grunt work.


Godwhacker said...

Years ago I had to do 100 hours of community service for my bad driving. I chose cleaning up the local beaches as my 'punishment'. If I could make the same money doing that as I did in my regular job, I'd still be there.

There was a simplicity to it. I saw trash, I picked it up. Simplicity is elegant.

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