Fannie Mae has notified lenders it won't accept loans from two title insurers after the two were tied to fraudulent real estate closings.

The mortgage buyer wrote in a memo first published by The Promote that it won't work with Riverside Abstract and Madison Title after they were linked to two closings by Boruch Drillman that the Department of Justice deemed fraudulent, The Real Deal reported.

“If you fail to comply with any requirements, including this, we may exercise additional remedies available under the Lender Contract,” Fannie Mae Deputy General Counsel Jeff Goodman wrote in a memo to lenders published by TRD.

The memo builds on rumors that some servicers and sellers have stopped doing business with Riverside and Madison after the insurers were named in the DOJ investigation, TRD reported.

“Madison Title has not been accused of any wrongdoing, and we are proud of our record of trustworthiness and integrity,” a Madison spokesperson said in a statement to Bisnow. “We remain steadfast in our commitment to transparency, telling our story, and addressing any concerns.”

Riverside Abstract didn't respond to Bisnow's requests for comment.

Riverside reached a deal last week to sell the company to nursing home mogul Avery Eisenreich, The Promote reported. At the time, the company attributed the sale to the false rumors about it being excluded from deals with Fannie Mae and Freddie Mac.

In December, the DOJ put out a press release detailing Drillman's $165M mortgage fraud conspiracy. Riverside and Madison were tied to two of Drillman's closings, but neither was charged.

This situation comes after Fannie Mae in November announced that all broker-involved agency loans would undergo a new pre-review rule after a Freddie Mac investigation of Meridian Capital Group. Although details of the investigation haven't been made public, Freddie Mac has stopped working with the commercial mortgage broker while the investigation is ongoing.