U.S. Rep. Elijah E. Cummings is asking the agency overseeing Fannie Mae why the mortgage financier is letting an embattled law firm handle its Maryland foreclosures despite problems documented by sister company Freddie Mac.
The Baltimore Democrat — in a letter to the Federal Housing Finance Agency late Wednesday — says information the regulator provided him in May about the Shapiro & Burson law firm "reveals a much more egregious level of abuse than previously known and raises significant new questions about why this law firm has not been banned from processing foreclosures on behalf of Fannie Mae in the same way it has been banned from processing them for Freddie Mac."
Attorneys with Virginia-based Shapiro & Burson have acknowledged in court hearings that at least some of their signatures on key foreclosure documents were actually made by other employees. A paralegal formerly employed at the firm complained to prosecutors that more than 1,000 deeds recorded by the firm after Maryland foreclosure auctions had false signatures, which could throw the homes' ownership into question.
Freddie Mac removed the law firm from its approved-attorney list for Maryland cases in March and said open cases would be sent to other firms.
A Freddie Mac spokesman said at the time that the decision had been "mutual." But the Federal Housing Finance Agency told Cummings in a letter that the removal came "after confirming that firm had for an extended period of time engaged in unacceptable and improper practices in foreclosure actions."
Fannie Mae and Shapiro & Burson's managing partner, John Burson, declined to comment on Cummings' request. A spokeswoman for the Federal Housing Finance Agency said officials had received the letter and would respond to it.
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