Fannie Mae stops foreclosure work done by Florida law firm -WSJ

Oct 26 (Reuters) - U.S. housing finance giant Fannie Mae (FNMA.OB) has paused mortgage foreclosure work that was previously referred to a Florida law firm under investigation by state officials, the Wall Street Journal said.

Fannie's latest move would affect all cases that "are not already subject to a foreclosure pause" by banks and other firms that service mortgages owned by Fannie, a company spokeswoman told the Journal.

Florida Attorney General Bill McCollum has opened an investigation into practices at four Florida law firms to determine if they fraudulently handled documents in foreclosure actions against homeowners. [ID:nN20245860]

Among the law offices being investigated by McCollum is one run by Florida lawyer David Stern.

Fannie Mae had already told mortgage servicers to stop sending cases to Stern's law firm pending a review of its work.

Fannie Mae could not immediately be reached for comment by Reuters outside regular U.S. business hours. (Reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman)