Is David J. Stern the poster boy for the foreclosure mess?

Meet David J. Stern. He's the high-living Florida lawyer who just might be the poster boy for the foreclosure mess that has currently embroiled Washington and Wall Street. Legal documents examined by The Upshot offer details on how Stern's firm, and other "foreclosure mills" like it, may have helped to unfairly force thousands of struggling Americans from their homes.

As we reported yesterday, dozens of state attorneys general are looking into allegations that major banks have been playing fast and loose with foreclosure rules in trying to speed troubled borrowers into foreclosure. Bank of America, JP Morgan Chase, GMAC Mortgage and others have announced a nationwide freeze on further foreclosures, and some federal lawmakers are calling for an across-the-board moratorium.

But while the banks are ultimately responsible, the root of the problem appears to lie with "foreclosure mill" law firms like Stern's. These operations process foreclosure cases on behalf of lenders, and their business model is based on moving the paperwork through as quickly as possible. That's why such firms have pioneered practices like "robo-signing" — whereby their employees process thousands of court documents in pending foreclosures without ever actually reviewing them, as the law requires. Of course, it's in the banks' interest for their contractors to move quickly, because the faster a foreclosure moves, the less time a struggling borrower has to fight it.

And Stern — no relation to the NBA commissioner of the same name — seems to have taken the foreclosure-mill concept to a whole new level. In 2009, his eponymous firm handled more than 70,000 foreclosure proceedings, on behalf of major lenders like Bank of America, JP Morgan, Fannie Mae, and Freddie Mac, according to an investigative report from August by Mother Jones.

So how did Stern's outfit set that torrid pace? A deposition given last month by a former employee of Stern's firm as part of a probe by Florida attorney general Bill McCollum, and examined by Yahoo! News, offers some hints.

Among other issues, Tammie Mae Kapusta described alarming problems with the company's process-serving procedure — the formal notification to homeowners, required by law, that a lender is opening foreclosure proceedings. "People were not served," Kapusta told McCollum's office. "Some of them would go to do modifications on loans, or go to take out other things, and it would come up that they were in foreclosure. And they would end up finding out that way that there was no actual service on them. ... Service was a complete mess."

But the serving process wasn't the only problem. Kapusta also testified that once a lender referred a case to Stern's firm, any later payments by the homeowner were simply ignored:

Q: What if a homeowner made payment?

A: That was never there.

Q: If that happened, it was never reflected.

A: No.

Kapusta added that she was "yelled at" for trying to talk to homeowners on the phone. "You're giving them too much time," she said she was told. "Everything was about getting the judgment entered because we have to report back to the banks."

A representative from Stern's law office did not respond to a request for comment from Yahoo! News. A lawyer for Stern's firm has previously denied Kapusta's allegations.

The techniques described by Kapusta may have been illegal, but they also seem to have been good for Stern's bottom line. Mother Jones outlined his lavish lifestyle:

His $15 million, 16,000-square-foot mansion occupies a corner lot in a private island community on the Atlantic Intracoastal Waterway. It is featured on a water-taxi tour of the area's grandest estates, along with the abodes of Jay Leno and billionaire Blockbuster founder Wayne Huizenga, as well as the former residence of Desi Arnaz and Lucille Ball. (Last year, Stern snapped up his next-door neighbor's property for $8 million and tore down the house to make way for a tennis court.) Docked outside is Misunderstood, Stern's 130-foot, jet-propelled Mangusta yacht — a $20 million-plus replacement for his previous 108-foot Mangusta. He also owns four Ferraris, four Porsches, two Mercedes-Benzes, and a Bugatti — a high-end Italian brand with models costing north of $1 million a pop.

Of course, Stern's firm is hardly the only foreclosure mill that seems to have cut corners — and perhaps broken the law — in speeding tens of thousands of foreclosure cases through the system. As the New York Times reports today, an employee for one firm, an arm of Goldman Sachs, admitted in testimony last year: "I don't know the ins and outs of the loan ... I'm not a loan officer." And JP Morgan Chase & Company used walk-in hires — derided by longer-term employees as "Burger King kids" — who barely seemed to know what a mortgage was.

(Photo: Lauren Victoria Burke/AP)