Real Estate & Property Law
Conn. AG Probes Law Firms Involved in Mortgage Foreclosures
Posted Jun 8, 2009, 04:46 pm CST
By Sarah Randag
Connecticut Attorney General Richard Blumenthal announced at a press conference today that he's sent letters to Fannie Mae and Freddie Mac to find out why the same two law firms have filed almost two-thirds of the servicers' foreclosure actions.
The Hartford Courant said that it reported last year on the Hunt Leibert Jacobson and Bendett & McHugh law firms' near-monopoly of the foreclosure market, and that Blumenthal opened and investigation as a result. Those two firms are Fannie Mae and Freddie Mac "designated counsel" (in addition to the Witherspoon Law Offices, which was named a designated counsel in November). The two firms filed about 1,200 lawsuits a month last year.
"Dominance over foreclosure service by a few select law firms and marshals has spurred complaints about improper or illegal practices—wrongfully allocating work to nonmarshals, forging papers, failing to serve papers and making kickbacks," Blumenthal said. "A scarce few are spinning foreclosures into fortunes and perhaps deepening homeowner despair."
Blumenthal's letter asked the mortgage servicers for a list of all of the firms in the state that have done foreclosures for them; the criteria used to select those firms; and an itemized accounting of the fee agreements with and fees paid to those firms.
Hat tip: Legal Blog Watch.
Additional coverage:
Connecticut Law Tribune: "Elite List Under Scrutiny"
Updated on June 26 to include link to subsequent Connecticut Law Tribune article.