Freddie Dumps Another Fort Lauderdale-Area Foreclosure Mill; Cases To Be Transferred To New Counsel

Housing Wire reports:

• Freddie Mac pulled its cases from a Florida law firm that is under investigation by the Florida attorney general. Freddie Mac spokesman Brad German confirmed Tuesday that Freddie has pulled its cases from the Law Offices of Marshall C. Watson, which represents lenders in foreclosure cases, but said he could not discuss why.

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• The AG investigation began under former AG Bill McCollum and relates to alleged fabrication and presentation of false and misleading documents in foreclosure cases, according to the AG's office.

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• Last fall, McCollum released several sworn statements from former employees at law firms under investigation, detailing alleged improprieties in the way foreclosure cases were being handled, including one from a former lawyer at the Watson firm.

• Attorneys at the Watson firm allegedly signed affidavits without a notary present, according to a September 2010 sworn statement from Jessica Cabrera, a lawyer there from December 2007 to July 2010. Attorneys at the firm would allegedly sign the documents and send stacks to notaries afterward.

• This process changed about eight months prior to the sworn statement, according Cabrera, when the firm realized there was a problem and employed roughly 50 notaries to work in-house.

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• Last fall, Fannie, Freddie and Citigroup stopped referring foreclosure cases to the Law Offices of David J. Stern, also a subject of the AG investigation.

For more, see Freddie Mac and Florida foreclosure law firm part ways.