October 1, 2010

In a detailed, 2-page letter on the letterhead of the Congress of the United States dated September 24, 2010 signed by representatives Alan Grayson, Barney Frank, and Corrine Brown to Michael J. Williams, President and CEO of Fannie Mae, Congress advises that it is “disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida working for Fannie Mae servicers” especially when four of such “mills” are “under investigation by the Attorney General of Florida for fraud”. The letter notes that several of the busiest of these mills show up as members of Fannie Mae’s Retained Attorney Network.

The letter states that “The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note” and that this practice “is blessed by a legal system overwhelmed with foreclosure cases and unable to sort out murky legal details, and a set of law firms who mass produce filings to move foreclosures as quickly as possible.” Congress requests that Fannie Mae remove the foreclosure mills under investigation for document fraud from the Retained Attorneys Network, and that “Fannie should have guidelines allowing servicers to proceed on a foreclosure only when its legal entitlement to foreclose is clearly documented”. Congress is thus now thinking along the same lines as the Florida Courts and the Supreme Court of Florida which require that chain of title to a mortgage and note be established by valid, admissible evidence and that foreclosure lawsuits be verified.

The letter goes on to ask: “Why is Fannie Mae using lawyers that are accused of regularly engaging in fraud to kick people out of their homes?” and “what steps is Fannie Mae taking to avoid the use of foreclosure mills?” and further “What additional steps is Fannie Mae going to take to ensure that foreclosures are done only when necessary and only in accordance with recognized law?” As to the first question, we have our own suspicions. As to the second and third, the answer is obviously “none”.

It is no secret that the “mills under investigation” are Shapiro & Fishman, The Law Offices of David J. Stern, and The Law Offices of Marshall C. Watson. Shapiro & Fishman has, notably, become very aggressive and arrogant in its tactics as we have personally evidenced in several cases. Stern’s misdeeds are a matter of public record and court documents.

Suspicious? You bet. Insidious? Absolutely. A possible ROCI conspiracy? Maybe. Looks like we are going to have to start doing some intensive discovery here.

Jeff Barnes, Esq.,