Paola Iuspa-Abbott
Daily Business Review
October 14, 2010

Fannie Mae and Freddie Mac, the government-sponsored mortgage giants, have temporarily stopped using a large South Florida foreclosure law firm that is among several firms being investigated by the Florida attorney general.

The Law Offices of David J. Stern in Plantation, Fla., and three other firms have been accused of fabricating documents on behalf of loan servicers and investors seeking to foreclose on distressed homeowners.

Freddie Mac instructed its loan servicers to stop referring foreclosure cases to the Stern firm pending the outcome of its own internal review, Freddie Mac spokesman Brad German said Wednesday.

Fannie Mae spokeswoman Amy Bonitatibus said it has stopped sending new cases to the Stern firm.

Telephone calls and e-mails seeking comment from David Stern were not immediately returned by deadline.

Florida Attorney General Bill McCollum’s office is also investigating the law firm Shapiro & Fishman, with offices in Boca Raton and West Palm Beach; Fort Lauderdale-based Law Offices of Marshall Watson; and the Florida Default Law Group in Tampa,

Shapiro & Fishman persuaded Palm Beach Circuit Judge Jack Cox to quash a subpoena issued by McCollum’s office.

The Stern law firm on Tuesday asked Broward Circuit Court Judge Eileen O’Connor to quash a similar subpoena. The judge’s decision is pending.

Without the Stern firm, Freddie Mac’s list of firms it uses for Florida foreclosures has shrunk to four firms, including Florida Default and Marshall Watson.

Freddie Mac’s decision came Friday, days before Citigroup announced it had stopped steering foreclosure filings to the Stern firm.

The agency’s move also came on the same day a controversial deposition by a former Stern employee was made public by the attorney general’s office.

In the Sept. 22 deposition taken by two Florida assistant attorneys general based in Fort Lauderdale, Tammie Kapusta testified she witnessed other employees sign affidavits and other documents without having knowledge of the foreclosure files, a violation of Florida legal rules.

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