Bank Lawyer's Blog

Alleged "Overcharger" Settles

Almost one year ago, we discussed an investigation by the Colorado Attorney General into the alleged inflation by foreclosure attorneys of certain foreclosure costs, and, subsequently, allegations of more widespread falsification of fees and costs by attorneys handling foreclosures in Colorado. At the time, I expressed the view that if there was anything to these allegations,"there are going to be some lawyers in Colorado who are in deep water without a life jacket. I hope they're all strong swimmers."

Last week, the Denver Post reported that at least one of the firms involved in the scandal had decided to haul itself out of the deep water by paying beaucoup bucks to settle with the State of Colorado and with class action attorneys.

Tens of thousands of Coloradans whose homes were foreclosed on since 2009 by law firm Aronowitz & Mecklenburg will share in a massive class-action lawsuit settlement over allegations the lawyers regularly inflated fees that homeowners were forced to pay to save their house.

The settlement, on paper since April but only now getting court approval, comes just days after the Denver law firm agreed to a separate $10 million deal with state investigators to settle an investigation into the same alleged misconduct.

The law firm — owned by Robert Aronowitz, his daughter, Stacey Aronowitz, and her husband, Joel Mecklenburg — is to dissolve in the next six months, according to terms of their settlement with the Colorado attorney general's office.

But not before the firm pays back roughly $2.5 million to more than 32,000 families — money the lawyers allegedly overcharged for the posting of legal notices in the cases.

The law firm denies it did anything wrong, but agreed to the settlement to avoid costly litigation, according to a copy of the 164-page document filed in Denver district court.

"Avoiding costly litigation." Are they worried about their own counsel padding, churning, or upcharging? Just wondering.

Before becoming misty-eyed over how damaged homeowners will now be made whole, pay attention to how the $2.5 million is being divvied up.

Those affected in the Aronowitz settlement should see a check ranging from $20 to $225 in the next couple of months, depending on which of three classes they belong to. Postcards have been mailed advising homeowners of the settlement.

Some people might get more than one payment, such as those who cured more than one foreclosure, even on the same house.

The lawsuit's plaintiffs — Rodrick Kemp, Linda Donna, Richard Lemesany, and Martin and Michaelie Wingo — each are to receive an additional $10,000, though the Wingos will share that amount. Another $875,000 will be paid to cover legal fees.

[...]

The three classes and the payouts include:

• Homeowners who paid a county public trustee what they owed on a mortgage, including the lawyers' fees, and stopped the foreclosure process, known as a cure. They will get $225 per foreclosure;

• Those who stopped a foreclosure through a loan modification. They will receive $100 only if they opt-in on the settlement, up to a maximum $1.1 million to be paid out for all;

• Homeowners who lost their house to foreclosure auction for a price that was less than what they owed. They will receive $20 per foreclosure.

Investors who purchased properties at county foreclosure auctions are not covered by the settlement because they were not plaintiffs, although they also were required to pay the lawyers' bills, which included the posting costs.

Also not covered by the settlement are other fees the attorney general alleges were overcharged, including up to $100 for a one-page document, called a "statement of qualified holder," that purportedly takes seconds to fill out.

Expenses charged for the filing of nonexistent Rule 120 lawsuits, revealed by The Post last year, also are not part of the settlement.

By accepting the payments, homeowners cannot sue for any other charges they might have overpaid in the foreclosure.

Aronowitz's $10 million settlement with the attorney general will be used largely to cover legal fees in the case and future consumer education. Only a few homeowners with current foreclosure cases are to be reimbursed.

Yes, once again,members of the "class" get peanuts and the big winners in both cases are the plaintiffs' attorneys. Sure, the few named class action plaintiffs get $10,000 each, but the class action plaintiff's lawyers get 80 times as much. The rest of the allegedly adversely affected borrowers get between $20 and $225.

In fairness, it appears that if there was wrongful conduct (and the law firm that settled has neither admitted nor denied that fact), it has been "deterred," at least with respect to the settling law firm. According to the Post, the settling law firm is going to be "dissolved," although I've read other reports that suggests that it may be sold rather than liquidated. It will be an enterprising buyer who would buy that firm's business, especially in light of the fact that the residential foreclosure heyday is long past. Then again, Colorado has legalized recreational marijuana use, so there's always hope.

The other two accused firms have decided to slug it out. Apparently, paying their own trial attorneys is not yet a sufficient inducement to lead them to pay off the plaintiffs' counsel and the state to just go away and leave them alone.

The American litigation system: everyone wins, as long as "everyone" is a trial lawyer.

The Art of the Deal

Having empurpled with rage the kisser of a regulatory agency, I'd like to turn now to offending attorneys for various bank vendors who seem to take to personify the quality of some lawyers that business clients love to hate: we're "deal killers."

Actually, some of us are.

A case in point: a large financial institution sends out an RFP to solicit vendors to sell their services to the bank related toi a line of business that the bank is pursuing. There's a great deal of money to be made, so you would expect that the vendors who want to bid on the work would put on their best "smiley face" and also put their best foot forward. You would also think that they'd want to avoid offending the object of their affection by committing a faux pas akin to, while curtsying to the Queen of England, breaking wind with the force and sound of a watermelon hitting the sidewalk after a 10-story drop.

The initial contract that's customarily involved in a bank's RFP process is a mutual nondisclosure and confidentiality agreement, almost always drafted on the bank's standard form. Most vendors who are serious about bidding either merely review the agreement to ensure that they're not selling their children to an Eastern European white slave ring, then sign it, or request changes where there is a critical legitimate concern with a provision. Seldom will a bidder who seriously wishes to make a good first impression turn the nondisclosure agreement over to the equivalent of a first-year law student who's intent on spotting issues in order to make his contracts professor proud.

Then, you have the bidder who's counsel revised an entire paragraph on the first page of the nondisclosure agreement to change nothing of substance, only to re-designate clauses labeled "(i)", "(ii)," and "(iii)" to "(a)," "(b)," and "(c)." This is correct from a formatting standpoint, but in the grand scheme of things, so unimportant an issue to raise that it rings a bell as loud as Big Ben at the stoke of midnight.

The responsible bank officer ponders, "If this is how they act when they are romancing me, how will they behave like when they have had their way with me? How long will it take, and what will it cost me, to negotiate the vendor agreement if I select this navel gazer and picker of sub-atomic nits?"

Snatching defeat from the jaws of victory: it's a talent.

"[T]here are millions of people out there, just like you and me, with their thumb on the self-destruct button."--Etienne de L'Amour.

Due Process: Delayed And Denied?

In November of 2012, an administrative law judge recommended that all charges brought by the Comptroller of the Currency against Patrick Adams, the former CEO of Dallas-based T-Bank, be dismissed. As we noted at that time, the road to vindication for Mr. Adams was long, hard, and expensive. What's shocking to us is that the long road is still not finished for Mr. Adams, notwithstanding the fact that ALJ found against the OCC on every one of its allegations, and, more critically, that although 12 CFR 109.40 provides that the Comptroller "shall render a final decision within 90 days after notification of the parties that the case has been submitted for final decision" (final submission was in early April 2013), the Comptroller has failed to render such a decision. Instead, the Comptroller has extended the 90-day period four times, most recently in May of this year, despite, according to a former OCC Deputy General Counsel who helped draft the OCC's enforcement procedures, no apparent authority to do so.

The troublesome nature of this process was recently discussed by attorneys Jerry Buckley, Robert Serino and Ann Wiles in an article for Consumer Financial Services Law Report. As noted in the opening paragraph, "Mr. Serino was formerly deputy chief counsel of the Office of the Comptroller of the Currency and established that agency’s enforcement program." Thus, their comments are not merely the rantings of a man once described by a reporter for a trade press rag as "a Texas curmudgeon." They are expressions of concern by people with knowledge of the process, one of whom had a hand in crafting the process that's being abused.

While focusing on general concerns in addition to Mr. Adams' specific case, the authors spend time discussing Adams' situation because, as they put it, it highlights the need for "additional procedural protections" to protect an individual facing enforcement action by a federal banking agency. They do a good job of running through the sequence of events, and the various facts that concerned the ALJ prior to making his decision, so I won't reiterate all of them. You can (and I encourage you to) read them in the linked article. At this point, the most disconcerting injustice to me is the failure of the Comptroller to issue a final decision "despite a statutory requirement to do so within 90 days."

But others would argue that the case against Mr. Adams highlights a lack of procedural protections for individuals who may suffer significant reputational harm, damage to their careers, and significant expense in defending themselves, only for it to be ultimately found that an enforcement action was not warranted.

By "others," the authors can include me and other bank regulatory attorneys I've heard from on this matter, including other former federal bank regulatory agency attorneys who are now in private practice. They can also include Texas Representative Pete Sessions, Chairman of the US House of Representatives Rules Committee, who, on June 20, 2014, sent the Inspector General of the Treasury Department a letter that requests an investigation by the IG into the handling of Mr. Adams' case.

It's irrelevant what OCC supervisory and enforcement personnel think of Mr. Adams. What's critical to the functioning of a process that claims to be "due" and "fair" is that the rules be followed by the government. A regulatory body that seeks to enforce the law but fails to follow it lacks credibility. The members of that agency who fail to follow the law deserve an Inspector General's investigation and any consequences to them that result. If that view engenders more anonymous troll-like hate mail that threatens me with regulatory retaliation and violates federal law, as was the case the last time I criticized the OCC, then I'll risk it.

The ALJ determined that the charges should not have been brought. We all realize that the OCC likely doesn't agree with that determination, but the Comptroller could have issued a decision within 90 days that decided not to follow that ruling. Then, Mr. Adams could have appealed that decision and had a resolution. Instead, by failing to follow its own rules, the OCC keeps the man in limbo indefinitely. Under whose sense of fundamental fairness is this appropriate? Vladamir Putin's?

I'll close with the same paragraph I used in my November 2012 post on this subject, because I still wonder where the government's lawyers who are involved in this matter stand. Do they really think that this is the way to handle this? Do they really think that this is fair and reasonable?

As I've contended previously, with great power comes great responsibility. When you have the power to ruin an individual's life, you need to make damn sure that you're doing "the right thing" before you start down that road. I don't see any concern with that "aspirational goal" in this case.

On the other hand, I think it's always useful for both government attorneys and those who oppose them to keep in mind the following ethical consideration, which, though "aspirational" in nature and part of the since-replaced Model Code of Professional Responsibility, embodies what the legal profession has long held to be proper conduct by those lawyers who wield the power to wreak havoc on the lives of the regulated:

EC 7-14 A government lawyer who has discretionary power relative to litigation should refrain from instituting or continuing litigation that is obviously unfair. A government lawyer not having such discretionary power who believes there is lack of merit in a controversy submitted to him should so advise his superiors and recommend the avoidance of unfair litigation. A government lawyer in a civil action or administrative proceeding has the responsibility to seek justice and to develop a full and fair record, and he should not use his position or the economic power of the government to harass parties or to bring about unjust settlements or results.

Fannie Slams The Door Shut

Alleged shenanigans in foreclosure proceedings by lenders' counsel in Colorado, which we've previously discussed here and here, have prompted some serious consequences for two of the law firms fingered in the investigations.

Fannie Mae is not going to send its foreclosure business to two specific law firms in Colorado, effective immediately, the government-sponsored enterprise can confirm.

"Fannie Mae has instructed servicers to cease referrals of new foreclosure cases to Aronowitz & Mecklenburg and the Castle Law Group and to transfer existing cases at those law firms to other firms," said Fannie Mae spokesperson Keosha Burns.

The GSE would not comment on why it so suddenly terminated its relationship with both firms.

As discussed in the previous posts, the Colorado Attorney General's office has been investigating whether the firms inflated costs of foreclosures, either directly or theough the use of captive service firms. The fact that Aunt Fannie would suddeenly drop the bomb on two law firms that handle the majority of its work in Colorado may be an indication that some action from the AG's office is forthcoming and the state regulator gave Fannie Mae a heads-up. If so, the results caused loan servicers in that state some heartburn.

The GSE's decision apparently caught more than a few servicers off-guard this week, and some were scrambling yesterday and today to find additional available legal counsel in the state, HousingWire was told by sources that wished to remain anonymous.

I'm confident that in the land of the over-lawyered, there will be plenty of sharks to eat the prey. One thing the United States does suffer from is an undersupply of lawyers.

HousingWire is one of the few trade press outlets that covers this story. As we've mentioned before, that's odd. It's got all the juicy elements fit for prime time: banks, lawyers, non-paying homeowners, large loan servicers, press-hungry state law enforcement officials: all the favorite enemies or heroes of a narrative, depending upon who's spinning the story. Yet, for some reason, certain major publications seem reluctant to jump on board. Inquiring minds want to know: "Why?"

Stay tuned. This will not be the last word on this troublesome topic.

A Kerfuffle Fades To Black

The forced placed insurance kerfuffle we last discussed three years ago appears to be winding its way to an unhappy ending for loan servicers in the way many claims against loan servicers, lenders, and big businesses of all kinds end in our over-lawyered land: paying huge sums to class action palintiffs' lawyers to make them go away.

To refresh our collective memories, forced placed insurance is property insurance that loan servicers buy when the borrower fails to keep the property insured. As we discussed previously, the practice has been around for decades, and makes sense in terms of protecting the collateral for home loans when the borrower fails to do so. However, as we said in our last post, government officials and the trial lawyers who follow them like orcas in a tuna boat's wake have been worked up over certain close relationships between force placed insurance companies and loan servicers. Commission splits, referral fees, and other alleged "kickbacks" have raised the ire of the righteous, who claim that the entire arrangement is a rip off of the borrower, who ends up having a very high premium added to the unpaid balance of his debt, a premium that would not be so high if servicers weren't profiting from the misery of the deadbeats downtrodden who don't pay their insurance premiums or, in many cases, their loans.

At any rate, after wading through the sludge of civil litigation for a while, servicers are starting to settle. Wells Fargo is the latest. Not that they think that they did anything they should have been sued for, mind you.

"While we believe the lender-placed insurance purchased on behalf of these borrowers was issued in accordance with the terms of the mortgages and applicable laws, we have decided to settle these cases to avoid protracted litigation,” Tom Goyda, a spokesman for Wells Fargo, told HousingWire. “We continue to support our lender-placed insurance services, which provide continuous insurance protection for real property customers when their voluntary insurance lapses.”

They continue to believe in it, but according to Housing Wire, they and the insurance companies are paying homeowners back about 11% of the amount of premiums. That is not chicken feed. Well, for the late John Candy's chicken, it might have been, but for a normal-sized chicken it's a big bag of cornmeal. The linked article also mentions that Chase paid $300 million in a settlement, and Citigroup another $110 million. How much of that actually made it into the pockets of affected homeowners is not related. You can bet your bottom dollar that the plaintiffs' lawyers made out like bandits very well.

My sentiments on this issue haven't changed much in the past three years. As I said in my previous post:

As I've indicated in other posts, I'm no fan of many of the practices of the loan servicers. However, as is the case with loan modifications, the root cause of this particular problem becoming a problem in the first place is the fact that borrowers don't comply with the loan terms they've negotiated. They are in default of the covenant in their mortgages to keep in place homeowners insurance that protects not only themselves, but the lender. The failure to keep such insurance in place gives the lender the contractual right to obtain the force-placed insurance or, for that matter, to declare the loan in default and foreclose. You don't want the servicer ordering expensive force-placed insurance? Pay your insurance premiums.

As I also said at the time, I am more sympathetic to loan investors, since the higher costs for insurance are ultimately borne by them, especially with respect to loans that borrowers don't repay. I thought that aspect of the problem could be better handled by changes to the servicing agreements.

I realize that my sentiments appears to be that of a small minority. The majority sentiment in this country appears to be that loan servicers are all public utilities that exist not to provide a valuable service to loan owners, but to provide low-cost public services to home owners. Any attempt to make money from the process is inherently suspicious and indicates an unreformed reactionary attitude out of line with the the concepts of liberty, equality, and fraternity that ought to motivate all of the citizens of the republic as they work together for "the common good," as determined by Elizabeth Warren and her running buddies.

Under the prevailing view, these servicers are getting just what they deserve. As are the class action lawyers who sue them.

The Tough Sledding Will Get Tougher

When H. Rodgin Cohen speaks, bankers listen. At least, they ought to listen if they want to learn something.

Bank Lawyer's Blog favorite Cohen gave a speech last week in New York City in which he dropped a few pearls of wisdom concerning why he thinks an already tough regulatory environment for banks is going to only get tougher. Among the reasons are the following:

• "The lingering public perception that banks got off too easy after the financial crisis could color regulators' mindsets." Cohen thinks that regulators will be especially tough on anti-money laundering and consumer law violations. He also believes that federal regulators may be motivated to pursue criminal penalties because of the perception among bankers that since recent criminal penalty settlements have not resulted in any individual bankers serving jail time, the risks of pleading guilty to crimes has somehow lessened. On the other hand, the long-time banking attorney thinks that banks have no one to blame but themselves for continuing to violate laws that they should, by now, know how to comply with.
• New OCC risk management standards for board members will provide a basis for new enforcement actions. In this area, Cohen thinks the regulators are being unrealistic. "I do worry that there is a point at which boards just cannot perform all of these tasks. You can only do so if you are prepared to have directors who really have no other significant occupation. … The cost would be to lose an incredible inventory of valuable directors." Amen, Brother Cohen!
• A recent FRB proposal that attempts to assert increased US control over foreign banks could hurt the US economy, Cohen worries. It also might have "an adverse impact on international trade and effective resolution."
• Too big to fail bank resolution procedures continue to be a preoccupation of the regulators and will continue to motivate regulatory actions. Cohen does think that effective too big to fail processes are "within reach" if the will exists to enact them. I consider Mr. Cohen to be an optimist on that issue, but he's smarter and closer to the throb of the power center in D.C. than I am, so I'll defer to his judgment.

Speaking of optimists, Cohen's partner, Michael Wiseman, gave an upbeat view about what all this increased regulatory pressure means for lawyers.

"It is an intellectually fascinating time to be a banking lawyer," he said. "When I started out, it was a relatively boring job."

"Intellectual fascination" will be (correctly) interpreted by banking clients to mean "higher legal fees." That's the silver lining that bankers always have a hard time seeing.

In Search of Foreign "Precedent"

Last week, while researching another topic altogether, I was linked through the magic of Google's algorithms to an old Volokh Conspiracy post that discusses U.S. Supreme Court Justice Stephen Breyer's remarks of eight years ago to the American Bar Association, in which he defended his previous citations to the courts of foreign countries to back up his opinions. Justices Scalia and Thomas have been particularly snarky over the years in their criticisms of Breyer's use of foreign decisions, so, apparently, Breyer felt the need to justify his consulting the decisions of the highest courts of Botswana, Nepal, and the Planet Zardoz in his search for useful precedent.

Breyer thinks that his references to foreign courts aid the spread of the rule of law.

"To tell you the truth, in some of these countries, they're just trying to create these independent judicial systems to protect human rights, contracts. If we cite them sometimes -- not as binding, I promise, not as binding --well, that gives them a little boost sometimes . . . It sort of gives them a leg up for the rule of law."

As I thumb through my copy of the U.S. Constitution, looking for "giving a shout out to foreign courts" as an enumerated function of the judicial branch, and absorbing the overwhelming ego implicit in Breyer's observation, it dawns on me that this is a good notion, because there is one court that needs Breyer's help. A good court. A court on which I, personally, would be humbled and honored to serve.

The Jedi Council

That little green guy in the center? Brilliant, I tell ya', brilliant. But, as you can see, he needs a "boost" that only either the yellow pages for greater Los Angeles or a citation by the U.S. Supremes could give him. Sure, he's a little dude (2.2 feet, according to his official biography), but he's DEEP, man! Know what I mean?

"Powerful enough to defeat Sidious, you are not... Twisted by the Dark Side, young Skywalker has become. The boy you trained, gone he is... Consumed by Darth Vader."

Bottle THAT and sell it, Justice Breyer! You Supremes could make a frickin' fortune.

"Stare decisis, I do not employ. As I go along, up it I make."

"Nothing But Attorneys" Not A Good Thing For Cuban

Mark Cuban, "Shark Tank" reality show star, failed reality show dance contestant, owner of the NBA's Dallas Mavericks, and bazillionaire, is not known for his small ego or a reticence to speak his mind. Still, it's amazing how much smack he has been talking about the SEC and its attorneys since he won his trial on insider trading charges. Not long ago, I heard an interview with him on a Dallas sports-talk radio station in which he called out SEC lawyers by name and mocked and blistered them in terms that even this blog's owner might have found a bit too "tart." On the other hand, he's stinking rich and he believes that the bureaucrats tried to ruin him without justification, so I get it.

USA Today recently published an interview of Cuban by the original "News Babe," Maria Bartiromo, in which Cuban showed that his ire against the SEC and its lawyers is not fading with the passing of the time. Excerpts:

Q: The SEC initially said you used a private tip to avoid a loss on the sale of your 600,000 shares of Internet company Mamma.com shares back in 2004. How did they get this so wrong?

A: Confirmation bias. They ignored fact after fact. Even those written by SEC agents. Instead of dealing with facts, they misrepresented and mislabeled testimony and documentation and ignored the obvious.

Q: Do you think it's that the SEC doesn't have the right resources and people overseeing business and the securities industry or are they just trying to make examples of high profile people?

A: I think they exemplify what type of organization you should expect when you have nothing but attorneys and in particular former prosecutors running the show. From every dealing and observation I have had of the SEC, it is obvious that lawyers run the show. There is a culture of trying to win, not trying to find justice. There is a culture of looking to find their next job. I always say that SEC equals "Swiftly Enhanced Careers." There is no business sense that I can find. That has, in my humble opinion, led to a bloated entity that has no idea what resources it needs, no concept of what its true goals should be or how to get there. They don't know how to make markets fairer or better at creating capital for business. They just know how to use the courts to litigate matters. (The SEC declined comment.)

Q: You refused to settle and went to trial. You had to spend more money on lawyers than on the potential fines you would have had to pay. Why was this so important to take this to the mat.

A: Because I hate to be bullied. I love this country. The idea that the people who over the first six years of my case ran the SEC could just ignore facts and care only about winning and losing and have no interest in justice, turned my stomach. I have the resources to fight. I felt compelled to take up that fight.

One of the lessons here is that when taking on the federal government in bet-your-life-and/or-fortune litigation, it helps to have a billion or more in assets to fund the defense. I guess when Marc bashes lawyers, he means "government lawyers." He obviously doesn't hate all lawyers since he and his brother, a lawyer, seem to get along.

There aren't many community bankers with Cuban's resources. They have to fight their battles against their federal regulators, when a dispute leads to civil enforcement actions, as best they can. Even when the government repeatedly loses and still keeps on trucking, regardless of the facts, it can always hope that it can bleed the defendant into a settlement. That's not a reasonable prospect when you're facing a Cubanesque opponent.

Therefore, whether or not you like the guy, you can cheer him on. You might even live vicariously through him.

Disparate Impact Receives Another Stay Of Execution

Leftist envelope stretchers throughout this great land they like to call "The People's Republic" breathed a huge sigh of relief last week when Mount Holly (NJ) Township settled a fair lending lawsuit filed against it only a couple weeks prior to oral arguments before the US Supreme Court. Consumer advocates cheered the development and lenders felt the bitter bile of disappointment rise in their throats, since advocates of the theory of "disparate impact" in the application of fair lending laws and opponents of that theory both understand that once the SCOTUS gets its hands on a case that it can actually decide, the theory is doomed.

The last time around this merry-go-round, when the City of St. Paul, Minnesota settled its fai r lending case before the SCOTUS could rule, the US Justice Department was reported to have worked behind the scenes to induce St. Paul to act like its New Testament namesake and turn the other cheek. Thus far, there have been no reports of similar bribery arm-twisting sweet-taking by the Justice Department, although that might be because the head honcho of the Justioce Department's Civil Rights Division, Thomas Perez, who was leading the charge on stretching disparate impact beyond the breaking point, has moved over to the Labor Department, where he can plague employers with a more solid footing of legal precedent to support his disparate impact ideology.

Banking trade groups were singing the blues.

"We respect Mount Holly Township's decision to settle, but we're disappointed that the Supreme Court has once again lost the opportunity to address whether disparate impact claims are appropriate under the Fair Housing Act," Frank Keating, president of the American Bankers Association, said in an email Thursday.

[...]

"I think it is extremely disappointing that a clear reading from the Supreme Court on this very important issue will not be forthcoming, at least in the near term," Ken Markison, vice president and regulatory counsel at the Mortgage Bankers Association, said Thursday.

That perspective was echoed by Steven Zeisel, general counsel at the Consumer Bankers Association. "We were hoping that the court would look at the case, but the parties did what the parties did, so we're just going to have to wait for another opportunity," he said.

With "another opportunity" not on the horizon, the most cogent warning for lenders came from attorney Paul Hancock.

"This issue isn't going to go away."

On the upside, fair lending attorneys for banks and other lenders will have the ability to send their kids to Ivy League schools and vacation in Aruba for at least another four or five years. Or, until a Republican is elected to the White House.

Stern: Down But Not Broke

Although, once again, I'm traveling on business this week, I have torn myself away from lesser matters to follow the latest news in the battle of The Sunshine State against "The Foreclosure King," David J. Stern. In April, we discussed the fact that the Florida Bar had filed a complaint against Stern that sought to take away his law license. As we observed at that time, perhaps a former assistant AG was correct when she predicted that Stern had made so much money from his foreclosure "practice" that he wouldn't care if the state took away his license to practice law.

It looks like we'll get a chance to see whether or not that sentiment is correct, because recently, Palm Beach County Circuit Judge Nancy Perez recommended that Stern be disbarred. The judge found that Mr. Stern had visited "massive injury" on the state's foreclosure system. In addition, she appeared to be particularly galled by Mr. Stern's claim that his deteriorating financial condition impaired his ability to withdraw from pending cases, an assertion she called a "misrepresentation."

The linked article lists all the money Stern made from selling his foreclosure-related enterprise before it went belly-up, and the amount of money he paid for real estate in Florida, which, apparently, he still owns. Nothing pays like running a foreclosure mill and bailing out at right time, I guess. The state may be winning its battle, but the only people who seem to care are the folks doing the pursuing. The pursued seems impervious to the financial consequences of the end-game.

In this case, "justice" might not only be exceedingly slow, but exceedingly irrelevant.