Florida Attorney General sets sights on foreclosure law firm
Ben-Ezra & Katz, the Florida-based foreclosure default law firm that laid off hundreds of staff after Fannie Mae pulled its business, is now the subject of an investigation launched by the Florida Attorney General's office. The AG's office said the Fort Lauderdale-based law firm is being investigated for allegedly "fabricating or presenting false and misleading documents in foreclosure cases," according to information published on the AG's website. Four other foreclosure law firms are under investigation, according to the AG's site, including one naming the Florida foreclosure law firm of David J. Stern, which also lost Fannie's business last year over issues related to its handling of foreclosures. The civil investigation also is looking into allegations that the firm presented mortgage assignments in court that were later proven to be inadequate. Earlier in the month, Fannie Mae sent a notice to mortgage servicers advising them to move all Fannie Mae legal matters handled by Ben-Ezra & Katz 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. Fannie Mae indicated that it cut its business relationship with Ben-Ezra & Katz after red flags were raised over document execution issues. As of Friday morning, the Florida AG's office had yet to file an official complaint against Ben-Ezra & Katz. A spokesperson for Ben-Ezra & Katz declined to comment on the AG investigation, but issued a statement saying the firm has retained Dan Gelber, a former federal prosecutor and U.S. Senate investigator, to conduct an audit of its practices. Gelber also will assist Ben-Ezra & Katz with quality control and policy issues, according to a statement from the firm. The firm added in its release, "Public allegations about us are not who we are. Our firm handles thousands of cases a year without any impropriety. We are fully committed to making sure all our cases are handled with the type of professionalism that has defined our firm." Write to Kerri Panchuk.