Steven J. Baum Firm Settles Over Infamous Foreclosure Costume Party

BUFFALO, N.Y. — A New York law firm that was harshly criticized after pictures surfaced from a company Halloween party where people dressed as homeless has agreed to pay $4 million in a settlement with the state over some of the tens of thousands of foreclosures it filed, attorneys said Thursday.

The agreement settles allegations that the Steven J. Baum Firm, one of the state's largest-volume foreclosure companies, engaged in "robo-signing" and other paperwork shortcuts to process a huge number of foreclosure cases for clients including Wells Fargo, JPMorgan Chase, Bank of America, HSBC and Citibank, according to Attorney General Eric Schneiderman's office.

Schneiderman said his office has been investigating the suburban Buffalo firm since April 2011, months before the company drew withering public criticism over pictures from its 2010 Halloween party that were published in The New York Times.

They showed part of the office decorated to resemble a row of foreclosed homes. In one picture, a person had a sign around her neck that read: "3rd party squatter. I lost my home and I was never served," apparently mocking the explanation of some homeowners facing foreclosure. The Times said a former employee provided the pictures.

The firm's president, Steven J. Baum, who was labeled as insensitive and held up by the Occupy movement as a symbol of corporate greed, later apologized. The firm announced in November that it would close.

Between 2007 and 2010, Baum attorneys filed more than 100,000 foreclosure actions, about 40 percent of all of those brought in New York courts. Examiners determined the firm prepared complaints in "assembly-line fashion," enlisting the services of an affiliated document processing firm, Pillar Processing Inc. Pillar, which Baum started, also is named in the settlement, along with Brian Kumiega, the Baum firm's managing partner.

"The Baum firm cut corners in order to maximize the number of its foreclosure filings and its profits," Schneiderman said. "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."

Baum attorney Elkan Abramowitz said the firm is relieved by the settlement but disputed some of the state's findings, including that attorneys were wrong to rely on representations of their clients, absent documented proof, that foreclosure proceedings were justified.

"A century of legal precedent states that an attorney is entitled to do just that," Abramowitz said.

He said the settlement includes no admission of wrongdoing.

"It is important to emphasize," Abramowitz said, "that after an exhaustive 10-month investigation, the attorney general's office did not identify a single instance where a foreclosure proceeding was brought by the Baum firm where the homeowner wasn't actually in default."

The attorney general's office said $2 million of the settlement funds will aid New York residents who are in or at risk of foreclosure. Under the agreement, Baum and Kumiega agreed to not represent lenders or servicers in new foreclosure cases for two years.

Baum's foreclosure practices also fell under intense federal scrutiny last year, culminating in November when Fannie Mae joined Freddie Mac in barring the firm from receiving new referrals from the federally backed mortgage giants. The firm and Pillar announced soon after they would close.

Following an investigation by the U.S. attorney's office in New York City, Baum agreed in October to pay $2 million and change its practices after admitting to errors in legal filings that it blamed on the high volume of mortgage defaults and foreclosures it handles.

Comments

[mjtaylor22]

04:29 PM on 03/31/2012

defrauding people out of their homes..and then making funof making them homeless.....esp when the so called professionals were not dilligent with people 's property documents......nor their rights...ywa fine the freak out of these crooks....hope those secretary;'s like not beignable to pay rent on unemployment....

[ImConfused]

08:00 AM on 03/24/2012

The Good Old Boys network strikes again

[StinkyMoBub]

11:16 PM on 03/23/2012

Chump change...

[yahooserious]

09:21 PM on 03/23/2012

Lawyers took care of lawyers.

[Dr Confuso]

06:50 PM on 03/23/2012

Does any of that money go to the victims?

[yahooserious]

09:19 PM on 03/23/2012

Of course not ! What are you thinking?

[loki]

09:44 PM on 03/23/2012

and its only a tiny fraction of what Baum made doing it, and, does not do anything to change the culture of the firm. They still bash those having hard times. The same people who without, Baum wouldn't have made so much money.

[Continuum1]

12:30 PM on 03/23/2012

$4 million for 40,000 wrongly attested foreclosures.

That's only about $100 penalty per foreclosure.

Not much of a deterrent to future bad acts by the foreclosure mills.

Yet, not one single individual is sent to jail.

[gysgt213]

05:51 AM on 03/23/2012

No one goes to jail though.

[webwzrd]

02:49 AM on 03/23/2012

They will close, move, set up shop under a different name, and proceed to continue profitting at other's expense and pking fun at their victims. American capitalism at it's best.

[As the world churnes]

09:59 PM on 03/22/2012

Settlement is, lazy, for law enforcement.

[planetjeffy]

12:25 AM on 03/23/2012

yep...a slap on their hand and they are free to do it again...and again

[IfIonlyknew]

11:16 PM on 03/23/2012

It is not a settlement....It is a payoff to the mob boss.

[aesop55]

06:23 PM on 03/22/2012

Schneiderman said his office has been investigating the suburban Buffalo firm since April 2011, months before the company drew withering public criticism over pictures from its 2010 Halloween party that were published in The New York Times.

This is the same Schneiderman that came out on the public stage to investigate the entire foreclosure mess and supposedly do something about it. Then all we hear is that there is a settlement of 25 mill - that some governors are going to use in part to erase their state's deficits. Now we have a new Schneiderman investigation settled - 4 million - no admission of wrongdoing, just a slap on the wrist. I am sure they made far more than 4 million so they will just consider this fine the cost of doing business.

So what is Schneiderman up to? And Beau Biden? Are they just making political points, because I sure don't see them making a difference.

Firms like Steven J. Baum shouldn't lose their ability to work with lenders or service foreclosures for two years. Their licenses should have been revoked, period.

[ld]

07:42 PM on 03/22/2012

I don't at all disagree with your feelings, but Mr. Schneiderman (along with CA's AG Harris) was the best of the law enforcement participants in the politics the surrounding the $25B national settlement you reference. Mr. Schneiderman. His original settlement proposal allowed NO immunity from either state or Federal prosecution. He fought hard and nearly single-handedly stonewalled the original Obama administration proposal, which was even more pro-bankster than the final. Mr. Schneiderman eventually gave in under tremendous pressure from New York Republicans and the Obama administration. The Obamas LITERALLY wined-and-dined him to weaken his resolve against the settlement.

We should give credit to people who at least tried. While he was arguably not very successful, I followed the politics of the settlement so I am certain Mr. Schneiderman fought hard for the good guys.

[GetRealSoon]

05:57 PM on 03/22/2012

"The attorney general's office said $2 million of the settlement funds will aid New York residents who are in or at risk of foreclosure"

So is this verifying the HAMP program was a failure. Is the A.G. stating that the HAMP program was an obstruction of justice. Something tells me that money isn't really going anywhere.

[BonnieDoon]

05:33 PM on 03/22/2012

There's that word again, "settlement".


Synonym for expunged.

[nypapajoe]

05:11 PM on 03/22/2012

All of the corporate criminals arrested so far and released in lieu of a Fine have walked away with their illegal gains still intact! I bet they file for insurance loses and get to make a profit!

[elbzee]

03:42 PM on 03/22/2012

I am sick to death of these settlements that include no admission of wrongdoing. To give up $4 million dollars one would have to be guilty of some form of wrongdoing. Anteing up and walking away is NOT the way to stop wrongdoing. It's just a way to allow the wealthy individuals and businesses to avoid any real repurcussions of misdeeds.

[hopingheart]

03:15 PM on 03/22/2012

so only half the settlement goes to those suffering foreclosures.

shouldn't the other half go to helping the homeless people these, ah, people mocked?