Wells Fargo Dumps Foreclosure King
The bleeding just won't stop for David J. Stern, the South Florida foreclosure baron and attorney who built an empire within the foreclosure industry, only to see it crumble. The subject of an eight-month investigation by Mother Jones published in August, Stern and his companies learned this past week that Wells Fargo was the latest bank cutting ties with Florida's foreclosure king, who handled thousands of foreclosures for the bank. Wells said it will instead send cases to other Florida foreclosure firms, the Palm Beach Post reported.
Wells Fargo's dumping of Stern comes a week after the twin government housing corporations, Fannie Mae and Freddie Mac, severed ties with Stern's firm and went so far as to seize documents from inside the firm. The two housing giants, who until recently counted Stern among their go-to law firms in Florida, previously ranked among the attorney's top clients; so tight were Stern, Fannie, and Freddie that he called them his "babies," according to a former employee of Stern's. In addition to Wells, Fannie, and Freddie, Wall Street heavyweights Citigroup and GMAC have stopped doing business with Stern, who's also under investigation by the Florida attorney general's economic crimes division.
The fallout for Stern has been massive. He himself wrote in a letter to terminated employees that he's lost more than 90 percent of new business in the past six months. In the same letter, he wrote that 70 percent of employees will be laid off due to the company's downturn; so far, more than 400 employees have lost their jobs within Stern's operation. Meanwhile, his publicly traded real estate processing company, DJSP Enterprises, has seen its stock plummet, from $6 in June to $0.71 on Friday.