By MICHAEL SASSO | The Tampa Tribune
“As foreclosures hit unheard-of levels in recent years, a handful of Florida law firms that operated as foreclosure factories reaped millions in fees.
One Tampa-based giant, Florida Default Law Group, had more than 1,000 lawyers, non-lawyer paralegals and support staff processing legal papers as cheaply and efficiently as possible.
However, some of those same law firms later were at the center of a national scandal in 2010 involving allegations of backdated and “robo-signed” documents and overall sloppy work. The Florida Attorney General investigated Florida Default Law Group, but dropped the case without finding fault.
Two years later, lawyers and judges say the worst abuses have stopped, and some of the mega-firms that dominated Florida foreclosure law have broken up or shrunk. In Tampa, Florida Default has changed its name to Ronald R. Wolfe and Associates, changed ownership and is now a smaller operation.
Lynn Tepper, a circuit judge in Pasco County, said the Tampa firm seems to want to leave the past behind.
“The attorneys seem to be doing a better job,” Tepper said. ” (The attorneys) actually seem to cringe when you mention Florida Default.”
Well before the housing collapse, a handful of law firms in Florida cultivated relationships with the banks that service mortgages and with Fannie Mae and Freddie Mac, the government-sponsored entities that purchase millions of home loans.
By the late 2000s, those relationships paid off when masses of homeowners began defaulting on their homes. Some foreclosure firms began filing thousands of foreclosures per month around Florida, at negotiated rates of around $1,100 a pop.
The Tribune analyzed roughly 2,000 initial foreclosure filings in Hillsborough County in October 2009 to see who was filing the most lawsuits. The one-time king of foreclosures, Broward County-based Law Offices of David J. Stern, filed the most at 352 cases. Florida Default Law Group ranked second with 323 new foreclosures.
It’s not clear how much money Florida Default Law Group’s made during the foreclosure boom, because it was a privately held company.
However, the Stern firm spun off part of itself into a publicly-traded corporation, giving a glimpse into its finances. Regulatory filings show that Stern’s revenues rose from $44 million in 2006 to $260 million by 2009.
Then, a massive scandal erupted around the country. In Florida, judges began targeting the Stern firm, in particular, and accused it of falsifying documents to speed up the foreclosure process. Major banks came under fire and stopped foreclosing on people until they could make sure the documents were authentic.
Finally, then-Florida Attorney General Bill McCollum launched an investigation into the practices of four large foreclosure firms: the Stern firm and Marshall C. Watson, both of Broward County; Shapiro and Fishman in Boca Raton; and Tampa’s Florida Default Law Group.”
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