Law Suits & Courts

Fannie Mae asks Stern firm to put foreclosure cases on hold

Posted on Wednesday, October 27, 2010

Paola Iuspa-Abbott
Daily Business Review
Fannie Mae has asked a Plantation-based law firm under investigation by state officials to put on hold all cases involving the government-sponsored mortgage buyer.
Fannie Mae late Monday also told the Law Offices of David Stern, which the Florida attorney general’s office alleges fabricated foreclosure documents, to stop setting up hearings for Fannie Mae cases.
The Daily Business Review reported two weeks ago that Fannie Mae and Freddie Mac had temporarily stopped referring new foreclosure cases to the firm until an internal investigation was complete. Two weeks ago, Plantation-based DJSP Enterprises, the company that processes the foreclosure fillings for the Stern law firm, launched an internal investigation into its foreclosure processing procedures. Stern is DJSP’s chief executive officer.
The Stern law firm is one of four Florida foreclosure firms under investigation by the Florida Attorney General’s office for allegedly fabricating court fillings and backdating court documents to help lender and loan servicing clients foreclose on homes.
Last week, the AG’s office released the deposition of a former assistant at the law firm who testified that the office manager for the foreclosure department would sign 1,000 files a day without reviewing them. The office manager also would allow paralegals to sign her name for her when she got tired, the former assistant said. Signing without having personal knowledge of each case violates Florida law.
With Stern receiving fewer new foreclosure cases, DJSP has laid off 300 employees this month. Amid the national controversy over suspicious court documents, Stern stepped down as chairman of DJSP last week. Since then, three DJSP executives and a board member have resigned.


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