Foreclosure Racket

By Andy Kroll,  August 7, 2010   Mother Jones

LATE ONE NIGHT IN February 2009, Ariane Ice sat poring over
records on the website of Florida’s Palm Beach County. She’d
been at it for weeks, forsaking sleep to sift through
thousands of legal documents. She and her husband, Tom, an
attorney, ran a boutique foreclosure defense firm called Ice
Legal. (Slogan: “Your home is your castle. Defend it.”)

Now they were up against one of Florida’s biggest foreclosure
law firms: Founded by multimillionaire attorney David J.
Stern, it controlled one-fifth of the state’s booming market
in foreclosure-related services. Ice had a strong hunch that
Stern’s operation was up to something, and that night she
found her smoking gun.

It involved something called an “assignment of mortgage,” the
document that certifies who owns the property and is thus
entitled to foreclose on it. Especially these days, the
assignment is key evidence in a foreclosure case: With so
many loans having been bought, sold, securitized, and traded,
establishing who owns the mortgage is hardly a trivial
matter. It frequently requires months of sleuthing in order
to untangle the web of banks, brokers, and investors, among
others. By law, a firm must execute (complete, sign, and
notarize) an assignment before attempting to seize somebody’s

A Florida notary’s stamp is valid for four years, and its
expiration date is visible on the imprint. But here in front
of Ice were dozens of assignments notarized with stamps that
hadn’t even existed until months-in some cases nearly a
year-after the foreclosures were filed. Which meant Stern’s
people were foreclosing first and doing their legal paperwork
later. In effect, it also meant they were lying to the
court-an act that could get a lawyer disbarred or even
prosecuted. “There’s no question that it’s pervasive,” says
Tom Ice of the backdated documents-nearly two dozen of which
were verified by Mother Jones. “We’ve found tons of them.”
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