The foreclosure law firm of Steven J. Baum, P.C. is about to close its doors. Baum’s firm is a “foreclosure mill,” one of the largest law firms in New York State representing banks and financial institutions in foreclosure proceedings against homeowners. The firm recently came under increased scrutiny after Joe Nocera of the New York Times reported on a Baum firm Halloween party where employees dressed up as homeless people to mock those they had foreclosed upon. He followed this up by describing Baum’s foreclosure practices.
Baum’s firm was already being investigated for shoddy legal practices prior to the media attention. The firm had been under investigation by New York Attorney General Eric Schneiderman, the Department of Justice had investigated whether the firm had filed misleading or erroneous documents and required the firm to pay $2 million to the United States, and MFY Legal Services, which defends homeowners, filed a class action claiming the firm failed to file necessary papers. The end was in sight once Fannie Mae and Freddie Mac barred its loan servicers from referring new cases there.
Baum’s impending closure should be lauded as a demonstration that shoddy legal practices have consequences. Any organization that conducts legal work in an allegedly unprincipled manner cannot be entrusted with such high stakes work.
As one of the largest foreclosure mills in the state, Baum’s firm represented financial institutions in thousands of foreclosure proceedings. New York State authorities should monitor the foreclosure proceedings carefully to make sure the transition of Baum’s cases to new lawyers is a smooth one. Families facing foreclosure should not be stuck in a legal limbo or saddled with unnecessary fees and accrued interest due to delayed proceedings. There also should be no impact on homeowners’ ability to modify their mortgages.
The closing of Baum’s firm does not end the need for the New York State attorney general to remain vigilant in monitoring the fairness and legality of foreclosure proceedings originating from Baum’s firm — or for the other families who face the loss of their homes due to the foreclosure crisis at large.
The Brennan Center will continue fighting for adequate legal representation for those facing foreclosure, and urges Attorney General Schneiderman to continue its monitoring and investigation to ensure that homeowners are treated fairly. The lawyers representing the banks in proceedings need to be held to the highest ethical standards and understand the seriousness of the cases. The closure of Baum’s firm is one of many necessary steps in ensuring fairness and due process for New York’s homeowners.