UPDATE: Conn AG Seeks Information On Foreclosure Law Firms
June 08 2009 - 3:38PM
Dow Jones News
Connecticut's attorney general is seeking information from
mortgage lenders Fannie Mae (FNM) and Freddie Mac (FRE) and
mortgage-processing services company Lender Processing Services
Inc. (LPS) on how they select law firms for foreclosure
services.
In a statement Monday, Connecticut Attorney General Richard
Blumenthal said his office is probing complaints that the majority
of the state's foreclosures are assigned to a select group of law
firms and complaints from consumers that they didn't receive proper
foreclosure notices from marshals.
"Dominance over foreclosure service by a few select law firms
and marshals has spurred complaints about improper or illegal
practices - wrongfully allocating work to non-marshals, forging
papers, failing to serve papers, and making kickbacks," Blumenthal
said in a statement. "Concentrating this work in a few hands can be
severely problematic - causing unconscionable costs and failed
notice delivery."
Blumenthal's office initially said he was seeking information
from banking technology company Fidelity National Information
Services Inc. (FIS), but later clarified Blumenthal was seeking
information from LPS.
LPS was spun off from Fidelity National last year.
Blumenthal said he is seeking the identity of all Connecticut
law firms employed for foreclosure actions from 2007 to the
present, details on the criteria used in selecting those firms,
information on fees paid to those law firms and any fees paid by
the law firms to the lenders and any complaints by Connecticut
consumers regarding failures to provide proper notice.
Spokespersons from Freddie Mac and Fannie Mae didn't immediately
return phone calls seeking comment Monday. A LPS spokeswoman didn't
immediately have a comment.
-By Chad Bray, Dow Jones Newswires; 212-227-2017;
chad.bray@dowjones.com