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Fannie Mae Cuts off Ties With Two Large Foreclosure Law Firms in Colorado
The national mortgage giant, Fannie Mae has unexpectedly cut off ties with two law firms that used to handle the lion’s share of foreclosures in Colorado. Fannie Mae will no longer have any business to do with The Castle Law Group LLC and Aronowitz & Mecklenburg, LLP with immediate effect.
Fannie Mae has remained tight-lipped on the matter and didn’t divulge why it took this action that led to the transfer of hundreds of cases to other attorneys. Insiders say that Freddie Mac, the other mortgage-finance business of the government, is also determined to make a similar move.
Fannie Mae’s decision has come while a Colorado attorney general investigation into the conduct of five foreclosure law firms suspected of bill padding remains ongoing.
According to state investigations, Castle Law Group and Aronowitz & Mecklenburg, two of the five foreclosure law firms being investigated, had charged additional amounts for posting legal notices on foreclosed homes largely done through process-service companies in which the lawyers had a financial tie or ownership stake. Both the firms had manipulated and influenced the foreclosure process to make undue profits of millions of dollars at the expense of homeowners and taxpayers.
Fannie Mae has a very strict code of conduct for the attorneys representing them. Industry experts say that maybe the results of the state’s investigation in the courtroom battles between Attorney General John Suthers’ efforts to obtain records of attorneys’ billing practices and the law firms’ fight to prevent details from becoming public have led to the decision.
Fannie Mae spokesperson Keosha Burns informed the media, “Fannie Mae has instructed servicers to cease referrals of new foreclosure cases to Aronowitz & Mecklenburg and the Castle Law Group and to transfer existing cases at those law firms to other firms.”
It is still unclear what financial impact this loss of work will have on the two law firms. Fannie Mae suspensions, though rare, are usually known to significantly affect the businesses of suspended entities.Fannie Mae Cuts off Ties With Two Large Foreclosure Law Firms in Colorado by Scott