A serious mistake by one of Florida's most infamous foreclosure mills has led to two different people being sold the same Miami-Dade County home. Osberto Jimenez bought the four-bedroom Cutler Bay house on short sale on October 6 and received a title certificate. The following week, real estate investor Marjorie Oster bought the house at a foreclosure auction.

Apparently, someone at the Law Offices of David J. Stern, P.A., which had been representing CitiMortgage, bungled the paperwork and forgot to call off the foreclosure auction once the short sale went through.

"So we both own the same house and I'm frustrated as hell," Oster told the South Florida Sun-Sentinel. "Someone screwed up."

Florida Attorney General Bill McCollum is investigating Stern's law firm and three other mortgage lenders' law firms -- the Law Offices of Marshall C. Watson, P.A., Shapiro & Fishman, LLP, and the Florida Default Law Group, P.L. -- for shoddy practices in the foreclosure process, including fabricating documents presented to courts. Attorneys general in all 50 states are now investigating foreclosure mills like Stern's law firm for "robo-signing" hundreds of thousands of foreclosure affidavits and presenting them to courts without verifying they were accurate.

From Foreclosure King to Top Target of Foreclosure-Gate Investigations

At one time, David Stern claimed that his firm processed 20 percent of all foreclosures in Florida. He had a staff of more than 1,000, but he has had to lay most of them off. CitiMortgage stopped using Stern's firm in September -- they now run their foreclosures through Shapiro & Fishman. Fannie Mae and Freddie Mac, which once sent the majority of their foreclosure cases to Stern, have also stopped using him (they also still use Shapiro & Fishman).

In testimony before the Senate Banking Committee this week, federal lawmakers heard that the widespread problems in the foreclosure process are still ongoing -- and present a "significant weakness" in the entire system. Some federal regulators have urged Fannie and Freddie to suspend all foreclosure proceedings until the problems can be worked out.

"We are seeing more instances of mistakes being made," said professor Darryl Wilson, a real estate expert at Stetson University College of Law. "There needs to be a lot more diligence and patience in dealing with these cases."

For Oster's part, the fact that the sale had been handled by Stern's law firm had her afraid she would never see her money again.

"I just wanted out because it was David Stern's firm," she said.

Luckily, on December 1 CitiMortgage agreed to vacate the sale, refund Oster's money plus interest, and cover her legal fees.

Jimenez, a 40-year-old truck driver who immigrated from Cuba five years ago, appears to have more faith in the foreclosure process and the process he used to buy the Cutler Bay on short sale.

"I knew things would get resolved. I did everything legal," he told the Sun-Sentinel.

Source: South Florida Sun Sentinel, "Stern's foreclosure mistake leads two to buy same house," Diane C. Lade and Doreen Hemlock, December 04, 2010