After allegations of falsifying court documents and illegal procedures, The Law Offices of David J. Stern will no longer be representing Fannie Mae in Florida foreclosures. Fannie Mae announced it has suspended business with David J. Stern and has hired nine new Florida law firms. More firms may be hired as Fannie Mae continues to evaluate the other law firms it uses.
The current real estate market, and ongoing foreclosure, and housing, crises, presents all sorts of issues that must be properly navigated by a struggling homeowner. Our Miami foreclosure defense lawyers have assisted many homeowners in buying enough time to reach the solution that is right for them. There are many alternatives to foreclosure, and often times it just takes proper planning to properly navigate against the potential pitfalls. Help is often available to those who seek it.
In a letter to two Florida lawmakers, Fannie Mae CEO and President wrote, “In instances where we learn that servicers or law firm are not adhering to our requirement or applicable law, we immediately engage and take appropriate action, which may include termination and notification of applicable law enforcement or regulatory agencies.”
Fannie Mae requires that its mortgage servicers use firms in their retained attorney network. Excluding the new additions, Fannie Mae used seven firms in Florida. However, four of the seven are under investigation by the State Attorney General. In Florida alone, Fannie Mae holds $189 billion in unpaid home loan principal in its single-family residence portfolio. On these mortgages, the loan delinquency rate is 12 percent.
Once a major customer of The Law Offices of David J. Stern, Fannie Mae also suspended all foreclosure proceedings handled by its staff. As we have spoken about here, sworn testimony of former Stern employees discusses the regular practice of forging signatures on foreclosure documents. Specifically related to Fannie Mae, some former employees have testified about hiding flawed files from Fannie Mae auditors. Nevertheless, Stern’s attorney maintains no intentional wrongdoing occurred at the firm.
While wrongdoing has yet to be proven at Stern’s law firm, Fannie Mae has erred on the side of caution by disassociating itself from a firm which has allegedly partaken in illegal practices. Intentional or not, the fact remains that at the very least careless behavior may have led to illegal foreclosures. Fannie Mae must be certain to keep a closer eye on its new hires.
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