Florida foreclosure default law firm Ben-Ezra & Katz laid off 236 staff members Monday after learning Fannie Mae would be pulling all of its default servicing business from the firm. Last week, the government-sponsored enterprise sent a notice to mortgage servicers advising them to move all Fannie Mae legal matters to other firms within Fannie's retained attorney network. ??Four days later, Ben-Ezra & Katz announced a 41% staff reduction, cutting its employee base from 586 to 350 employees, according to Ray Casas, a spokesman for the Fort Lauderdale-based law firm. In an interview with HousingWire, Casas would not elaborate on what positions were cut, but the firm blamed the redundancies on its recent loss in business from Fannie Mae. "We were forced to take this action after Fannie Mae surprisingly terminated its relationship with the firm last week," Ben-Ezra said in a statement. Fannie Mae cut its business relationship with Ben-Ezra & Katz after red flags were raised over document execution issues. "We have terminated the firm. It is our expectation that law firms will handle matters in strict compliance with proper procedures, ethical codes of conduct and legal requirements," a Fannie Mae spokesperson said in a statement last week. "In instances where we have reason to suspect that a firm may not be doing so, we will immediately engage and take appropriate action." Ben-Ezra & Katz also made headlines in its home state Friday when a Miami judge held the firm's founding partner Marc Ben-Ezra in contempt of court after accusing him of filing 'sham' foreclosure documents, according to an article published by the Palm Beach Post. ??Casas, Ezra's spokesman, declined to comment on the court's motion. Fannie Mae took similar measures in November when it ended its business relationship with Florida foreclosure law firm David J. Stern. At the time, Fannie issued an announcement directing servicers to move their cases to other firms after it was alleged Stern had signed foreclosure affidavits in bulk without properly reviewing files or having a notary present. Write to Kerri Panchuk.