[Updated Friday 9:30 a.m. with comments from Ben-Ezra & Katz law firm] Foreclosure default law firm Ben-Ezra & Katz is laying off 154 additional staff members as the firm winds down its foreclosure practice, at least temporarily. The impacted employees were notified Thursday. Despite news reports suggesting the firm will shutter its doors entirely, a spokesman for Fort Lauderdale-based Ben-Ezra said the firm will operate as a boutique real estate law firm going forward. Whether it will resume foreclosure services at some point was not immediately clear. February was the start of a tumultuous three-month run for Ben-Ezra. In the early spring, Fannie Mae sent a notice to mortgage servicers advising them to move all Fannie Mae legal matters from Ben-Ezra to other foreclosure law firms. The result was a substantial cut to Ben-Ezra’s business, and then a layoff that cut the firm’s staff from 568 to 350 employees in February. “Despite the potential for chaos and disorder to the court system created by Fannie Mae’s instructions, we want to complete an orderly transition of our work so that this is a smoother process for our clients and the courts,” said Marc Ben-Ezra. “We hope that Fannie Mae will live up to the obligations that were imposed upon it by the court. “Unfortunately, particularly to the hundreds of people who are or will be out of work, our commitment to acting honestly and forthrightly led to the devastation of our foreclosure work, having to transfer so many files to other law firms.” The firm had discovered technical errors in a very small percentage of files and notified Fannie Mae, which then ordered lenders to stop using Ben-Ezra & Katz and to pull their files, the firm said.  Most loan servicers took back both Fannie Mae and non-Fannie Mae files. “It is impossible to sustain this practice with the amount of work that is left,” Ben-Ezra said.  “It took us 20 years to grow from a two-man boutique to a firm with 568 employees. It is sad that a lot of very good people have been left jobless and that our involvement in community and charitable causes will have to be curtailed.” While a spokesman for the firm could not say how many staff members will be left to run the remaining real estate side of the practice, some attorneys and support staff will remain at the firm. Ben-Ezra scored a few legal victories against JPMorgan Chase after legal disputes surfaced over the chaotic transfer of files after servicers started cutting ties with Ben-Ezra in the wake of Fannie’s advisory note earlier in the year. In one case, JPMorgan Chase was forced to post a $4 million surety bond to ensure payment for Ben-Ezra’s services as it focused on moving the servicers’ files. Write to Kerri Panchuk.