Fannie and Freddie Fire David Stearn’s Law Firm

There is some poetic justice in the action Fannie and Freddie have just taken in firing the David Stearn Law firm which the NYT’s reported in their story, “Fannie and Freddie Cut Ties With David Stern’s Law Firm“.

The government-sponsored companies, which own or guarantee more than half of the nation’s mortgage market, ended dealings with the firm, David J. Stern PA, after it came under scrutiny from the Florida attorney general’s office amid claims that documents used in home seizures were fraudulent or improperly prepared.

This is a big first step in the process of exposing criminal actions.  The next step is to prosecute.

The NYT’s goes on to say,

“We’ve terminated Stern as one of our designated counsel,” a Freddie Mac spokesman, Brad German, said Tuesday. “We’ve also started taking possession of all files of Freddie Mac-owned mortgages from Stern’s offices.”

The article also says that Freddie Mac will review all the files they retrieve form Stearn’s office before sending them to another law firm.  Hopefully the review will be in depth to determine what other fabricated or forged documents exist in each file.  Hopefully this addtional information will be used to take legal action against this law firm.  News and evidence of their illegal actions have been brought to light in the past but all too often, judges did not want to see or hear the truth.  Now judges will have to listen and look at the truth then judge accordingly.

Fannie Mae also is going to retrieve their files from Stearn’s offices.

Fannie Mae, based in Washington, will retrieve its documents this week and find new law firms to process them, a company spokeswoman, Amy Bonitatibus, said.

Those of us who have been writing about the fraud that has and still does exist in the banking industry, can get a small measure of satisfaction from this action.  Much of the action stems from the investigation being conducted by the Florida Attorney General.  While I have alsways believed that anyone is innocent until proven guilty, I believe in this case enough evidence has been presented by other bloggers and attorneys representing homeowners against the banks to believe that this law firm – along with some others being investigated – are guilty of fraud.

Unfortunately, too many judges take the position that lawyers are all ethical people bound by their code of conduct and all banks are honest and trustworth since we all trust them with our money everyday.  There is no way – believe many judges – that either lawyers and banks would break the law, especially so blatently.

But you and I and all those others who have been talking about this for the past three plus years, know better.  Three years ago many laughed at me for even suggesting such a fraud could even exist.  Now, these same people come to me and say, “how did you know?”.

The down side of this firing is that a lot of good people – clerks and admim staff – will lose their jobs and many of those will become victims of the foreclsoure crisis as well.  As for the many lawyers working for Stearn’s firm who will lsoe thier jobs, I feel no sorrow.  In fact, I would like to see them disbarred, prosecuted and thrown in jai – Stearns included – as he was the mastermind behind the illegal actions, fabricated documents, lies and forgeries on the many cases  (thousands) they have worked on.

Again, it is a beginning.  We shall wait and see how this all plays out now.

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  • Sharon Leslie-Clarke  On November 19, 2010 at 7:09 PM

    I work in one of the buildings this firm occupied (2 floors) and I heard that 1200 plus people lost their jobs. I also heard they can’t locate Mr. Stearn’s.

    You should know though that there are a few typos in this article.

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