Wednesday, March 9, 2011

Firm folds; foreclosure court stuck | The News-Press | news-press.com

Firm folds; foreclosure court stuck | The News-Press | news-press.com

The collapse of a prominent South Florida mortgage foreclosure law firm under investigation by the state is tying up about 7,400 mortgage foreclosure cases in Southwest Florida and court officials don't know what to do.

David J. Stern of Plantation sent a letter of withdrawal Friday to the state's 20 chief judges and included a packet of the case numbers, plaintiffs and defendants in the thousands of cases on which his firm was most recent attorney of record.

That number is 4,455 in Lee, 1,686 in Collier and around 1,260 in the rest of the circuit - Charlotte, Hendry and Glades counties. Because of financial constraints, he told the judges he is no longer handling foreclosure matters in Florida as of March 31.

The number totals about 100,000 statewide.

"It's just unprecedented - just like this whole avalanche of cases," said the 20th Judicial Circuit's chief judge, G. Keith Cary. "We've got a problem on our hands."

In the letter, Stern wrote the banks he represented - including Citi, GMAC, Bank of America and other large institutions - fired him last fall and took many of the files in November. He wrote the banks should have hired new attorneys and filed paperwork to let him off the cases so a judge could approve the transfer of power.

"For reasons unbeknownst to us, of those aforementioned stipulations, new counsel has failed to file them with the court," he wrote. "In other cases, our former clients have simply failed to obtain new counsel altogether.

"If our former clients do not cause new counsel to appear to represent them by March 31, 2011, your honor should treat the pending cases on the enclosed list as you deem appropriate."

Cary said he's never encountered a case like this in which a firm abandons thousands of cases. He said the proper protocol, according to Florida's rules of civil procedure, requires an attorney to file a motion to withdraw from a case, get a hearing date and get a judge's approval.

"It doesn't comply with the rules of civil procedure," Cary said. "So, I'm not sure how we're going to react to it. This isn't how you withdraw from cases. You can't just walk."

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