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Paralegal Accuses Florida Law Firm of Mishandling Foreclosures

By Lynne DeVenny

You'd have to be living under a rock not to know that a foreclosure crisis is rocking the nation, with Bank of America recently stopping the sale of foreclosed homes in all 50 states, pending a large scale document review amidst accusations of mishandled paperwork.

In Florida, former paralegal Tammie Lou Kapusta was under sworn oath when she told investigators for the Florida Attorney General's office that employees of her former employer, the Law Offices of David J. Stern PA, a foreclosure firm, created improper documents which were filed with state courts to speed up the foreclosure process. A representative of the firm denied Kapusta's allegations.

Kapusta, who spoke under oath, said the Stern firm ballooned from 225 employees when she started in March 2008, to more than 1,100 when she was fired in July 2009. She described a disorganized workplace where documents got lost and mortgages were misfiled. The training process was ?stupid and ridiculous,?
she said.

?There were a lot of young kids working up there who really didn?t pay attention to what they were doing,? she said, according to a transcript. ?We had a lot of people that were hired in the firm that were just hired as warm bodies.?

Kapusta says that she was fired in July 2009 after she refused to falsify documents and questioned the firm's deliberate use of the wrong Social Security numbers "to search military records for people who couldn't be located or identified."

Kapusta's allegations that the firm lost documents, misfiled mortgages, signed paperwork without reading it, misdated records, improperly notarized documents, and broke rules designed to protect homeowners fulfilling military obligations are extremely serious. A representative of the firm, where she worked as a senior paralegal for over a year, called her a "disgruntled employee."

But if Kapusta is not a disgruntled employee but simply an honest person who got in way over her head at her first paralegal job and questioned foreclosure procedures at the cost of that job, then she's someone who should be commended for coming forward to tell the truth.

Kapusta's September 22, 2010 deposition by the Office of the Attorney General has been posted at a number of sites, including Scribd. She describes a high-pressure, quota-based work environment, with supervisors and "mean and nasty" attorneys screaming at each other and the staff, and eight floors of employees, many with insufficient training, processing four to five hundred foreclosure files for major mortgage companies - per floor - every day. She says she was yelled at when she tried to spend time on the phone with homeowners facing foreclosure.

This is not the kind of job we dream of when we go to paralegal school, but it is the kind of real life ethics scenario that should be discussed, because it's one of the most challenging that any legal staffer may face. Discovering that your employer may be engaging in fraudulent and dishonest behavior and then questioning it could leave you out on the street, or in the middle of a government agency investigation, with your name splashed all over the news like Kapusta's and difficulty finding another job because of where you worked.

Doing the right thing is at the heart of all legal ethics training, but it takes an incredible amount of courage to speak up when you find yourself at the mercy of someone doing all the wrong things.

Source: Bloomberg Business Week

Full post as published by Practical Paralegalism on October 09, 2010 (boomark / email).