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Stern Cuts Staff After Losing Fannie, Freddie Work

Nov. 4 (Bloomberg) -- David Stern, the Florida foreclosure lawyer who is under investigation by the state’s attorney general, made “a substantial layoff” after Fannie Mae and Freddie Mac cut ties with his firm.

The layoffs occurred today, Jeffrey Tew, Stern’s lawyer, said in an interview. Stern’s law firm and the foreclosure-processing business he runs, DJSP Enterprises Inc., have cut about half their staff during the past two weeks, Tew said.

“It’s the cumulative effects of clients not referring business,” Tew said. He said he couldn’t comment on whether there would be further staff reductions.

Freddie Mac and Fannie Mae, the mortgage-finance companies operating under U.S. conservatorship, said this week they ended ties with Stern. Florida Attorney General Bill McCollum said he is investigating Stern’s law firm because it appears to be submitting “false and misleading” documents in foreclosure cases.

Stern’s businesses continue to operate and have a total of between 400 to 500 employees, Tew said. DJSP, whose chief executive officer is Stern, said in an Oct. 22 statement that it was cutting 198 employees, bringing total layoffs at the time to about 300.

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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