Newbie Attorneys Reaking Hell at Foreclosure Law Firms

by Marian Wang, ProPublica

A few months into the foreclosure scandal, we reviewed job listings seeking supposed foreclosure experts and even department supervisors, noting that many listings offered low pay and required little education [1]. Some listings we saw were posted by staffing agencies, recruiting workers and paralegals for banks and foreclosure law firms. As it turns out, those clerical workers weren’t the only ones whose credentials have faced more scrutiny as a result of the foreclosure fiasco.

The Palm Beach Post recently reviewed records from the Florida Bar and reported that nearly half of the attorneys working at Florida’s four largest foreclosure law firms have practiced law for less than three years [2]. Matt Weidner, a foreclosure defense attorney, told the Post that inexperience may have led novice attorneys to unknowingly commit foreclosure offenses, but they are nonetheless complicit in the mess.

Some of these attorneys include workers who were laid off from David Stern’s “foreclosure mill [3]” law firm–now notorious for having cut one too many corners [4]. We noted that when the firm announced in November that it was laying off 70 percent of its staff, those workers would have no shortage of places to go. The Post’s piece confirms this. Some of the Stern attorneys are now working at other foreclosure law firms:

“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.

We’ve also reported [5] on some of these depositions–as well as on the problem of forged attorney signatures [6] in foreclosure cases. Though the Florida attorney general office has been investigating a number of foreclosure law firms for fraud, one of its early subpoenas [7] was blocked by a state court judge who said that law firms may be regulated only by the Florida Bar or the Supreme Court.

The president of the Florida Bar, Mayanne Downs, told the Palm Beach Post that the bar has no power to open its own inquires, but it does investigate complaints. It’s currently scrutinizing about 60 lawyers for foreclosure fraud or problematic foreclosure defense.