Every good crisis deserves a good villain, and every good villain deserves a good yacht.
As if the ongoing foreclosure fiasco wasn’t already scary enough, the top Wall Street Journal item right now is the news that Fannie Mae and Freddie Mac are reviewing the work of the enormous Florida law firm run by David J. Stern, which they both have sent work to for years. It’s the first time the mortgage giants have been directly drawn into the ongoing crisis, because though they don’t actually service loans, they do use the foreclosure mills that are turning out to be rife with fraud.
Mr. Stern, wealthy and secretive, is turning into one of the foreclosure tragedy’s main characters, although not much about his life and work are known–and the only public photos of him are grainy. His firm was put in the spotlight with the recent release of a deposition by one of his former paralegals, who described a kind of Coen brothers-tier shadiness: When Fannie would came in to look at processing, for example, employees would dress up nicely and begin “typing in what they want to see.”
But even before that deposition, Mother Jones did a piece about Mr. Stern that described sexual harassment charges, a class-action racketeering case, and his 16,000-square-foot mansion, plus a neighbor’s place he bought last year for $8 million, for tennis court space. “When people say, ‘Oh my God, the economy is bad,’ I’m like, ‘Oh my God, it’s great,’” he is said to have told a crowd at a conference this year, where the band Social Distortion played a private show.
In August, The Observer profiled Kerry Propper, the New York investor who recently acquired Mr. Stern’s foreclosure processing business. “I believe in efficient markets,” Mr. Propper said when asked about foreclosures. “An efficient market needs certain things, and the main thing, I’ve learned, over many years, is a rule of law.”
The Jones article also said that besides four Ferraris, four Porsches, two Mercedes-Benzes, and a Bugatti, Mr. Stern has a jet-propelled, 130-foot, $20 million-plus yacht called “Misunderstood,” which replaced his 108-foot boat called “Lady J.” And The Times once mentioned, wonderfully, that Mr. Stern considered naming his new one something else, “Su Casa Es Mi Casa.” It would have been the boating version of Greg Lippmann’s famed I’m Short Your House!!! shirt, but Mr. Stern’s wife and others “cautioned against it.”