Florida Foreclosure Mill Makes Major Payroll Dump After Fannie Pulled Its Cases From Firm Over Faulty Paperwork

In Broward County, Florida, the South Florida Sun Sentinel reports:

• A Hollywood law firm that processes thousands of foreclosures for major lenders laid off almost half of its 568 employees Monday, days after the government-owned mortgage giant Fannie Mae pulled its files from the practice.

• Ben-Ezra & Katz, in a memo released by a company spokesman, said the firm was "forced to take this action after Fannie Mae surprisingly terminated its relationship with the firm." In a notice sent five days ago, Fannie Mae officials said all exisiting foreclosures, mediations and bankruptcies needed to be transferred to other loan servicers by Tuesday, citing "document execution" issues.

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• Monday's layoffs echoed the massive job cuts that the law office of David J. Stern and public-traded affiliate DJSP Enterprises instituted after Fannie Mae and Freddie Mac, the other federal mortgage guarantor, dumped them. Fannie and Freddie comprised the bulk of Stern's business. About 700 Stern employees lost their jobs, according to regulatory filings.

• Former staffers later sued, saying Stern's operations did not give them the 60-day notice required under the Worker Adjustment and Retraining Notification Act, or WARN, Act. A Ben-Ezra spokesman said WARN notices were sent on Monday to all employees.

For the story, see Foreclosure law firm lays off nearly half of its staff, after losing Fannie Mae.