Stern’s firm is also retained by Fannie to handle foreclosures in the Sunshine State. The Stern firm, which I describe in great detail, is one of four Florida foreclosure firms now under investigation by the state attorney general’s economic crimes division. “We’ve got these people with incentives to go ahead with foreclosures and flood the real estate market.” (There were 2.8 million foreclosures in 2009, and 3.8 million are projected for this year.) The mills think “they can just change things and make it up to get to the end result they want, because there’s no one holding them accountable,” says Prentiss Cox, a foreclosure expert at the University of Minnesota Law School. As I wrote,īackdated documents, according to a chorus of foreclosure experts, are typical of the sort of shenanigans practiced by a breed of law firms known as “foreclosure mills.” While far less scrutinized than subprime lenders or Wall Street banks, these firms undermine efforts by government and the mortgage industry to put struggling homeowners back on track at a time of record foreclosures.
The letter raises many of the same issues as a recent investigative story of mine, “Fannie and Freddie’s Foreclosure Barons,” which focused in part on one powerful firm in southern Florida, the Law Offices of David J. Alan Grayson (D-Fl.) and Corinne Brown (D-Fl.) and addressed to Fannie CEO Michael Williams, cites the criticism and investigations of these firms, often called “foreclosure mills,” and charges that “Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes.”
In a sternly worded letter, the three Dems grilled the company on its use of powerful law firms-some of which have been accused of breaking the law-to handle foreclosures. Three House Democrats, including Barney Frank of Massachusetts, the chair of the powerful financial services committee, took government housing corporation Fannie Mae to task on Friday.
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