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Law Firms Probed in Mortgage Foreclosure Cases

To date, it's been primarily overreaching, greedy mortgage companies that have played the role of the villains in the national mortgage foreclosure crisis. But now, at least in Connecticut, it appears that law firms may be implicated as well.

The Hartford Courant reports that State Attorney General Richard Blumenthal has sent letters to Fannie Mae and Freddie Mac as well as a third mortgage company to find out why they repeatedly retained the same two law firms to handle all of their foreclosure proceedings in Connecticut.

According to Blumenthal, the two law firms -- Hunt Leibert Jacobson in Hartford, Conn., and Bendett & McHugh in Farmington, Conn. -- file nearly two-thirds of the foreclosure actions clogging Connecticut courts. Records show that these two firms filed about 1,200 suits last month, with 99 percent of them foreclosure actions. The firms have so much work that even their process servers are getting rich. Hunt Leibert gave one process server, Joe Fiorillo, more than $2.2 million in business last year while Bendett & McHugh provided him with $762,000-worth of work. After expenses, Fiorillo netted over a million dollars.

Blumenthal is already investigating Hunt Liebert and Bendett & McHugh for complaints related to improper service, illegal practices and allocating work to process servers who fail to serve papers or take kickbacks. The question is will Fannie Mae and Freddie Mac also wind up liable for these activities?

Posted by Carolyn Elefant on June 8, 2009 at 05:24 PM | Permalink | Comments (10)

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