By Thom Weidlich – Nov 21, 2011 5:45 PM GMT+0000
Steven J. Baum PC, one of the largest law firms specializing in home foreclosures in New York state, is shutting down after losing business from Fannie Mae and Freddie Mac.
The Baum firm notified government entities, including the New York State Department of Labor, that it planned mass job cuts, it said in an e-mailed statement today. Earl Wells, a firm spokesman, confirmed that it’s closing.
This month, Fannie Mae and Freddie Mac, the mortgage- finance companies operating under U.S. conservatorship, dropped Steven J. Baum PC from their lists of law firms eligible to handle foreclosures. Home-loan servicers including Bank of America Corp. (BAC) and Ally Financial Inc. also stopped using the firm, which last month agreed to pay the U.S. $2 million and change its practices to resolve a probe of faulty foreclosure filings.
“Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices,” Steven J. Baum, who owns the firm, said in the statement.
Baum wouldn’t comment further, Wells said.
The firm has about 67 full- and part-time employees at its headquarters in Amherst, New York, just north of Buffalo, and 22 full- and part-time employees at its Westbury, New York, office on Long Island, according to the statement.
The agreement with the U.S. government concluded an investigation into whether the firm filed misleading pleadings, affidavits and mortgage assignments in courts, according to a statement by U.S. Attorney Preet Bharara in Manhattan. The settlement didn’t constitute a finding of wrongdoing.
Steven J. Baum PC has attracted lawsuits and fines for its actions during the housing crisis. It has been accused of overcharging, filing false documents and representing parties on both sides of a mortgage transfer. On Oct. 28, a New York Times column reported that the Baum firm held a Halloween party last year during which employees dressed as foreclosed-upon homeowners.
New York Attorney General Eric Schneiderman is investigating the Baum firm, two people familiar with the matter said in May. Danny Kanner, a spokesman for Schneiderman, declined to comment on the investigation last week.
Earlier this year, Florida foreclosure firm Law Offices of David J. Stern ceased processing home-seizure cases after Fannie Mae, Freddie Mac and home-loan servicers, including the largest U.S. banks, dropped it.
Lawrence Grayson, a Bank of America spokesman, and Gina Proia, an Ally Financial spokeswoman, last week confirmed that their companies no longer use the Baum firm.
State attorneys general and federal regulators are negotiating with banks including JPMorgan Chase & Co. and Bank of America to try to reach a settlement over faulty foreclosure practices.