Monday, October 10, 2011

Fannie Continues Using Unnamed Florida Foreclosure Mill Sweatshop Despite It Being Fired By Freddie Earlier In Year; Says Files Transfer Too Costly

The Palm Beach Post reports:

  • Federal mortgage backer Freddie Mac fired a Florida law firm this year for "foreclosure processing abuses," but sister company Fannie Mae continues to use the firm because it's too expensive to transfer files to new attorneys.

  • A Federal Housing Finance Agency Inspector General report released Tuesday criticized the two entities for, among other things, a lack of communication about problems within law firms used to take people's homes.

  • But, even when Freddie Mac told Fannie Mae why it was firing the Florida firm, Fannie decided to retain the law firm's services, noting that the cost of moving cases "would be substantial."

  • According to the report, Fannie Mae is expecting a $5.5 million bill for transferring files from the Law Offices of David J. Stern to new attorneys. Both Fannie and Freddie fired the Plantation-based Stern firm in November.

  • The firm Freddie fired but Fannie retained handled 43 percent of Fannie Mae's foreclosure cases in Florida, the report notes. While the firm is not identified in the report, Freddie Mac cut ties with the Fort Lauderdale-based Law Offices of Marshall C. Watson in early March. The Watson firm remains on Fannie Mae's retained attorney network list.

For more, see Fannie Mae sticking with fired Florida law firm.

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