New York Times columnist Joe Nocera ran a story on October 29 alleging that staff members at the Buffalo foreclosure law firm of Stephen J. Baum ridiculed foreclosure defendants and opposing attorneys at a 2010 Halloween party. The column was based on accusations by, and pictures provided by, a former Baum employee. The pictures that accompanied the story allegedly showed staff members dressed as homeless people squatting in foreclosed houses, ridiculed defendant motions for an order to show cause in foreclosures, and included a "rest in peace, Crazy Susie" sign and picture of New York foreclosure defense attorney Susan Chana Lask.
Mr. Baum issued a statement to the Buffalo News on Saturday apologizing for the event.
Baum's office has been in the news a lot recently. Last April, the New York State Attorney General, Eric Schneiderman, served subpoenas on the firm and its related default services company, Pilar Processing (I wrote a long blog a year ago about Pilar Processing and the outsourcing of foreclosure services to investor-owned non-law firms.)
The Baum firm signed an agreement with the United Sttaes Attorney's Office in New York City, where its foreclosure practices will be overhauled. Baum's office has not admitted any wrongdoing, but agreed to pay a $2 million fine. The U.S. Attorney, among other things, alleged that Baum employees signed mortgage assignments, which purported to transfer ownership of mortgages, on behalf of MERS, the troubled Mortgage Electronic Registration Service.
MERS was sued by the Attorney General of Delaware, Beau Biden, last Thursday, and New York Attorney General Schneiderman has subpoenaed the organization as well. Biden and Schneiderman are holdouts from a global settlement among the attorney generals of the fifty states with the mortgage industry. A settlement by most of the rest of the states - which will not hold banks accountable for past mistakes - appears imminent.
I have written many blogs on the foreclosure mess in New York State and the country. If you live in the Greater Rochester NY area and are facing foreclosure, please contact me for a phone analysis, at no charge, of your options.