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New York Attorney General Eric T. Schneiderman announced a $4 million settlement with a New York foreclosure law firm due to abuses in its foreclosure-related legal work.
[IMAGE]Founder of the firm Steven J. Baum, managing partner Brian Kumiega, and Pillar Processing are required to pay $4 million to the state of New York. Baum and Kumiega are also barred from handling new foreclosure-related cases for two years. Balm formed Pillar in 2007 to process the majority of the firm's foreclosure documents.
Before shutting most its operations on or about December 31, 2011, the firm was largest foreclosure defense firm in New York, and represented large mortgage servicers including Wells Fargo, JPMorgan Chase, Bank of America, HSBC, and Citibank.
Between 2007 and 2010, Steven J. Baum P.C. filed over 100,000 foreclosure proceedings. The AG's investigation found the firm did not take proper steps when moving forward with foreclosure proceedings. From at least 2007 through 2009, the firm's attorneys repeatedly verified complaints in foreclosure actions stating that the plaintiff was ""the owner and holder of
[COLUMN_BREAK]the note and mortgage being foreclosed,"" when, in many securitized loan cases, the firm did not have proof that the plaintiff was the owner and holder of the note and mortgage, according to a release from the ""AG's office"":http://www.ag.ny.gov/.
Complaints were also prepared in an assembly-line fashion by Pillar employees who were not attorneys and did not have attorney supervision.
Also, complaints were, at times, signed by attorneys without being reviewed, and certain documents were routinely pre-signed and notarized. Until 2011, the firm's attorneys routinely signed documents without being in the presence of a notary, and some notaries notarized documents signed by an attorney not present in the state at the time of notarization.
The Baum Firm also repeatedly failed to file the Request for Judicial Intervention (RJI) in a timely manner. The firm's lack of timeliness when filing RJIs harms homeowners, according to the release, because the filing leads to a settlement conference where potential loan modification options are explored, and also prompts notification to local housing counselors who can reach out to the homeowner to provide assistance.
""The Baum Firm cut corners in order to maximize the number of its foreclosure filings and its profits,"" said Schneiderman, who made the announcement Thursday morning. ""This settlement demonstrates that my office will not allow New York homeowners to face the drastic consequence of foreclosure based upon inaccurate documents filed in court. Foreclosure law firms must ensure that their client has the authority to sue and is the rightful holder or assignee of the note and the mortgage before filing cases.""
The firm reported that it was closing down its operations in November 2011 after Fannie Mae and Freddie Mac announced that mortgage servicers could no longer use the firm to handle foreclosures.
