Foreclosure law firm Steven J. Baum P.C. and Pillar Processing LLC have agreed to a $4 million settlement with New York Attorney General Eric Schneiderman for conducting improper legal filings against distressed homeowners.
As part of the largest foreclosure law firm settlement in the nation, Steven Baum and Brian Kumiega, managing partner at Amherst, N.Y.-based Steven J. Baum P.C., have been barred from representing lenders or servicers in new foreclosure-related cases for two years.
The AG's investigation found that the firm routinely brought foreclosure proceedings without taking appropriate steps to verify the accuracy of the allegations or the plaintiff's right to foreclose against a distressed borrower. Pillar employees, who were not classified as attorneys, prepared the complaints that were then notarized by Baum attorneys without reviewing the contents of the documents.
From 2007 through 2009, the firm's attorneys repeatedly verified complaints in foreclosure actions stating that the plaintiff was “the owner and holder of the note and mortgage being foreclosed.”
However, there was no proof for this claim. Over 100,000 foreclosure proceedings were filed between 2007 and 2010 by the firm, which also represented some of the largest servicers of residential mortgage loans, including Wells Fargo, JPMorgan Chase, Bank of America, HSBS and Citibank.
The defense firm stopped its business operations at the end of 2011. According to Schneiderman, the firm “cut corners” in order to maximize the number of its foreclosure filings and its profits.
As a result of this settlement, $2 million will be allocated towards programs that offer assistance to homeowners who are at risk of losing their property to foreclosure as well as to help victims of predatory lending practices.
“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,” Schneiderman said in a press release. “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.”
