Fannie Mae Halts Law Firm's Foreclosure Work
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By NICK TIMIRAOS
Fannie Mae said on Monday it had suspended all activity on foreclosure cases that had been referred to a Florida attorney under investigation by state officials.
Fannie and its smaller sibling, Freddie Mac, had previously stopped referring new cases to the Law Offices of David J. Stern, of Plantation, Fla., earlier this month. On Monday, Fannie said its latest move would affect all cases that "are not already subject to a foreclosure pause" by banks and other firms that service mortgages owned by Fannie, said a company spokeswoman.
Calls to Mr. Stern's firm weren't immediately returned on Monday evening.
The law firm has been at the center of allegations by the Florida attorney general's office, which has released depositions of former law-firm employees who have alleged that the firm forged notarized documents and that employees signed files without reviewing them in a bid to speed through foreclosure filings.
"In instances where we learn that a firm is not adhering to our requirements or to applicable law, we immediately engage and take appropriate action, which may include suspending or terminating the firm, and notifying appropriate law enforcement and regulatory authorities," said Fannie Mae spokeswoman Amy Bonitatibus.
Speaking to an industry convention in Atlanta on Monday, Fannie Chief Executive Michael Williams said it was important for the industry to ensure that mortgage-document problems were "fixed quickly so it doesn't create an overhang" of bank-owned property.
The Florida firm is one of nine in the state that is approved by Fannie for its servicers to use on behalf of the company. The Florida firm processed more than 70,000 foreclosures last year, and Mr. Stern was named "attorney of the year" by Fannie in 1998 and 1999, according to his biography.
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