David J. Stern Is No Rothstein; He's His Own Kind of Monster
I love it when people say the comments on this blog are even better than the posts.
That big(gest) house on the corner is Stern's mansion in Fort Lauderdale. The bigger yacht also belongs to Stern. He also owns $17 million in waterfront property on Hillsboro Beach.
That's what this thing is all about -- it's a new way to do journalism, with direct interaction from readers at lightning speed. And it can be awesome or ugly or cringe-inducing -- just like life. It's a brave new world, and it's the future of the news business.
Case in point: The first reader to comment about foreclosure attorney David J. Stern did so on July 28, a week before a depthy New York Times piece on Stern's dubious role in the nation's foreclosure crisis.
But you can look on YouTube to see that the company was exposed many months before that story was published.
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I've been quietly keeping track of Stern coverage but for some reason hadn't written about the guy. Good folks emailed me articles and told me to watch Stern because he was the next Scott Rothstein.
And their are similarities, the most eerie of which is that Stern has a... million-dollar-plus Bugatti sports car. The difference is that Stern, unlike Rothstein, doesn't have two of them. He's also not surrounded by cops and bodyguards and doesn't keep a stripper at the Ritz-Carlton as far as we know.
There are other glaring differences. While Rothstein was all over the society pages and drummed up attention everywhere he went, Stern shuns the spotlight. In fact, the photo at left is the only one I could find of the attorney. Another difference: Stern's work, unfortunately, was based on real cases -- foreclosures cases where tens of thousands of people were losing their homes to banks and lenders like Fannie Mae that had hired Stern for the job. More than 70,000 foreclosures rolled through Stern's Plantation office last year alone.
It was a foreclosure mill -- and judges at the Broward County Courthouse seemed willing to rubber-stamp Stern's cases, ignoring irregularities and alleged signs of fraud like forged signatures on some of the documents. Chief Judge Victor Tobin was interviewed in the NYT article that was was published on September 6:
Lawyers say judges are simply ignoring problematic or contradictory evidence and awarding the right to foreclose to institutions that have yet to prove they own the properties in question.
"Now you show up and you get whatever judge is on the schedule and they have not looked at the file -- they don't even look at the motions," says April Charney, a lawyer who represents imperiled borrowers at Jacksonville Area Legal Aid. "You get a five-minute hearing. It's a factory."
But Victor Tobin, chief judge in the 17th Judicial Circuit, which includes Broward County, defended the effort. "There are more assets devoted to those three foreclosure divisions in Broward than to any other division in the building in terms of case managers and that sort of thing to help the general public," he said. "The people who come get fully, fully heard."
Whatever. Bottom line: Lawyers like Stern were getting filthy rich on the foreclosure mess while homeowners were taking a bath. How rich? Inside, a rundown of Stern's playthings.
This is the litany of big-money items that David Stern has acquired from the foreclosure disaster (according to NYT):
Brian Foley, a compensation consultant in White Plains, concluded that Mr. Stern made $17.8 million in 2008, including $12.64 million in compensation and nonrecurring benefits of $4.36 million. In the deal with Chardan, Mr. Stern and his affiliates were paid $93.5 million: $58.5 million in cash and $35 million after the transaction closed, according to government filings. In addition, Mr. Stern got a promissory note for $52.49 million to be paid out over the next couple of years.
In recent years, Mr. Stern and his wife, Jeanine, have bought nearly $60 million in real estate, mostly in Florida, property records show. Their Mediterranean-style home on Harborage Isle Drive, in a gated community in Fort Lauderdale, faces water on two sides and cost almost $14 million. Not far away, in Hillsboro Beach, the Sterns bought two waterfront properties for $17 million.
Mr. Stern also spent $6.8 million last year on a 9,273-square-foot apartment at the Castillo Grand Residences in Fort Lauderdale, part of a Ritz-Carlton complex. He and his wife own two homes in Beaver Creek, Colo.; one was purchased in 2001 for $4.975 million, and another bought in 2007 for $14.2 million.
His automobile collection may be worth $3 million, auto experts said; it includes a 2008 Bugatti, multiple Ferraris, Porsches and Mercedes and a Cadillac.
This being Florida, Mr. Stern also collects boats. A 108-foot Mangusta yacht, Lady J, is for sale at $5.9 million, Web postings show. It was replaced by a 130-foot yacht that cost about $20 million, according to an acquaintance who requested anonymity over concerns about Mr. Stern's influence in the community.
Not bad for a guy who graduated from something called South Texas Law. But alas, it seems the recession is finally catching up to the foreclosure industry. On Friday, Stern-related firm DJSP announced layoffs of 198, bringing its total to 300 lost jobs. The company's stock has plunged 88 percent to a buck-seven.
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