The Florida Bar's investigations into foreclosure fraud by its members jumped 63 percent in the past year, but no disciplinary actions against attorneys have been levied since complaints began to mount in the fall of 2010.
The responsibility to hold lawyers accountable for foreclosure misconduct now rests solely with the Florida Bar after the state attorney general's investigation into high-volume foreclosure law firms collapsed this week.
Since March of last year, the number of foreclosure fraud investigations of attorneys by the Bar grew from 222 cases to 362. During the same time period, about 130 cases were closed with no findings of fault. There are 229 pending cases.
Despite the lack of punitive action, Arne Vanstrum, associate director of lawyer regulation for the Florida Bar, said the regulatory group is taking the investigations seriously. And while the attorney general's probe focused on illegal activity, the Bar's review also includes scrutiny of ethical violations, he said.
"We're putting a lot of resources into this," Vanstrum said Friday, a day after Florida Attorney General Pam Bondi announced an unfavorable court ruling that effectively shut down her foreclosure mill investigations. "These cases are unique in that it's very widespread, not just in Florida but nationwide."
All of the leading partners in the seven firms targeted for state investigation remain members in good standing with the Bar.
Specifics of the Bar investigations are not public, but complaints generally include forged signatures on court documents, bad notarizations and backdated paperwork.
Scores of attorneys - sometimes just out of law school - have worked at Florida's big foreclosure firms since home repossessions went full throttle in 2008.
Sanctions for attorneys guilty of misconduct range from public reprimand to disbarment.
Tampa-based foreclosure defense attorney Mark Stopa said he's concerned that David J. Stern, once dubbed the foreclosure king of Florida, hasn't faced reprimand.
Stern's Broward-based firm collapsed in the fall of 2010 after the start of the state investigation and subsequent loss of clients. By early 2011, he announced he was closing shop, leaving as many as 100,000 cases statewide in limbo.
"That caused an incredible burden on innocent parties and the courts, and why he hasn't been punished for that and that alone is something I'm not sure I will ever understand," Stopa said.
Stern's attorney, Jeff Tew, has said that Stern's clients immediately removed their files when they fired the firm, giving the company no time to do a proper transfer to new lawyers.
Foreclosure defense attorneys are also under Bar scrutiny, with 97 cases having been opened. Of those, seven resulted in discipline and 51 were closed with no discipline.
"There are bad seeds on the defense side, too," said Boca Raton-based defense attorney Ron Kaniuk of Ricardo, Wasylik & Kaniuk.
Vanstrum said he can understand if homeowners are frustrated by what may seem like a lack of action on the foreclosure fraud queries.
"But we have to do a very thorough investigation," he said. "We have to look at it in a much broader fashion."
By Kimberly Miller, Palm Beach Post Staff Writer
Source: Palm Beach Post