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Saturday, April 9, 2011

Attorney General Schneiderman Subpoenas Foreclosure Law Firm

New York Subpoenas 2 Foreclosure-Related Firms
The New York Times by Gretchen Morgenson - April 8, 2011

Eric T. Schneiderman, the New York attorney general, has issued subpoenas to the state’s largest foreclosure law firm and a related company, indicating that his office has some doubts about the effort by state attorneys general to resolve questionable foreclosure practices among the nation’s top banks. The New York investigation appears to center on two of the state’s foreclosure industry giants: the Steven J. Baum firm, headquartered in Amherst, N.Y., and Pillar Processing, a default servicing firm set up by Mr. Baum that was spun off in 2007. Representing JPMorgan Chase,Wells Fargo and other large banks, the Baum firm has handled an estimated 40 percent of foreclosure cases in the state. Pillar Processing provides extensive services to the firm. A spokesman for Mr. Schneiderman declined to comment. Mr. Baum said in an e-mail: “The firm will cooperate with the attorney general in this matter. We are confident that after a full review by the attorney general they will find no wrongdoing.” Attorneys general across the country have been working on ways to rectify foreclosure improprieties by the nation’s biggest banks and have entered into negotiations in recent weeks with these institutions about a national settlement. Tom Miller of Iowa is leading that effort. While Mr. Schneiderman has been participating, his new investigation points to the possibility that he will take a different path.

Large foreclosure law firms have come under scrutiny in states outside New York. Last year, the Florida attorney general began investigating the David J. Stern firm, the largest in that state. That investigation is continuing, but the law firm stopped bringing foreclosure cases last month. Like the Stern firm, Mr. Baum’s operation flourished as the mortgage crisis deepened. Since the end of 2007, it has filed more than 50,000 new foreclosure cases in New York, according to data compiled by the New York State Unified Court System. The firm employs approximately 70 lawyers. Along with the attorney general, federal prosecutors in Manhattan have requested information about the Baum firm’s practices, according to a lawyer who has represented borrowers against the firm. The lawyer spoke on condition of anonymity because the communications with the prosecutors were private. A spokesman for the Department of Justice declined to comment. Scrutiny of the Baum firm has increased in recent months after significant errors surfaced nationwide in legal paperwork used by banks to seize delinquent borrowers’ homes. For example, documents detailing how much borrowers owe have been signed by bank representatives who say they have not verified the information. Other problems involve the questionable notarization of documents, or paperwork indicating that the foreclosure process was begun without providing proof that the entities involved had the legal right to foreclose. The Baum firm has drawn rebukes on its legal practices from judges in several New York jurisdictions. Judges in courts across the state have rejected scores of cases filed by the Baum firm, saying it has failed to provide the documentation necessary to commence foreclosure. Last November, Judge Scott Fairgrieve in Nassau County district court imposed sanctions of $5,000 on the Baum firm in a foreclosure case and required it to pay more than $14,000 in fees to the borrower’s lawyers. When awarding the sanctions, the judge wrote: “Bringing legal proceedings when there is no legal right to do so, due to lack of standing, stalls the efficient administration of justice in the system.”

Paul D. Stone, a lawyer in Tarrytown, N.Y., has been defending a foreclosure case against the Baum firm since 2009. “I’ve never seen any firm file such ill-conceived, ill-researched, nonfactual materials with a court,” Mr. Stone said. The judge overseeing his case recently ordered Mr. Baum’s firm to pay some of the borrower’s legal costs. Hoping to eliminate defective filings, last fall New York courts began requiring lawyers bringing foreclosure cases to attest to the accuracy of their papers. The Baum firm was founded in 1972 by Marvin R. Baum and has been overseen by Steven J. Baum, his son, since the elder man died in 1999. Steven Baum created Pillar Processing in 2007, a provider of real estate default services, and it is located in the same office complex in Amherst as the law firm. Pillar was purchased in 2007 by Tailwind Capital, a New York hedge fund; some of Pillar’s debt and equity is also held by Ares Capital, a publicly traded investment company in New York City. Representatives of Tailwind did not respond to an e-mail seeking comment. An Ares spokesman declined to comment. Pillar Processing’s default servicing practices have attracted criticism from Cecelia G. Morris, bankruptcy judge in the Southern District of New York. In a court hearing on Feb. 5, 2008, Judge Morris said she would no longer accept any material from Pillar Processing in her court and added that if more paperwork from Pillar came in, she would deny the motions associated with it. Linda M. Tirelli, a lawyer in White Plains who represents homeowners, discussed three current foreclosure cases in which she faces the Baum firm. “The documents don’t make sense in any of them,” she said. In another foreclosure being defended by Ms. Tirelli, a lawyer for the bank told the court that the Baum firm had filed inaccurate documents as it sought to take over a borrower’s property. After trying unsuccessfully to find every link in the chain of title on the property, the Baum firm prepared inaccurate papers to fill in what was missing, according to court documents. Speaking generally and not specifically about the Baum firm, Raymond H. Brescia, assistant professor of law at Albany Law School, said: “We’re seeing a disproportionate number of cases in the foreclosure context where questionable filings have been made. I think it’s easy to say this is the largest and most wide-ranging fraud against the courts in the United States. Lawyers have to have a good-faith basis for the factual assertions they make to the court; they are responsible if they file pleadings that are baseless.”

****************************************RELATED STORY:

Foreclosure law firm under investigation after practices questioned
The New York Times by Gretchen Morgenson - April 9, 2011
Baum firm under AG scrutiny

NEW YORK, NY -- Eric T. Schneiderman, the state attorney general, has issued subpoenas to the state's largest foreclosure law firm and a related firm, indicating that his office has some doubts about the effort by state attorneys general to resolve questionable foreclosure practices among the nation's top banks. The state investigation appears to center on two of the state's foreclosure industry giants: the Steven J. Baum firm, headquartered in Amherst, in suburban Buffalo, and Pillar Processing, a default servicing firm set up by Baum that was spun off in 2007. Representing JPMorgan Chase, Wells Fargo and other large banks, the Baum firm has handled an estimated 40 percent of foreclosure cases in the state. Pillar Processing provides extensive services to the firm. A spokesman for Schneiderman declined comment. Baum said in an email: "The firm will cooperate with the attorney general in this matter. We are confident that after a full review by the attorney general they will find no wrongdoing." Attorneys general across the country have been working on ways to rectify foreclosure improprieties by the nation's biggest banks and have entered into negotiations in recent weeks with these institutions about a national settlement. While Schneiderman has been participating, his new investigation points to the possibility that he will take a different path. The Baum operation flourished as the mortgage crisis deepened. Since the end of 2007, it has filed more than 50,000 new foreclosure cases in New York state.

7 comments:

wondering said...

Good for this attorney Paul Stone. “I’ve never seen any firm file such ill-conceived, ill-researched, nonfactual materials with a court," he says.

Watch out, Paul Stone. You will soon have the OCA goons looking for you. Gary Casella is not happy, I'm sure. He's the top 'ethics' thug in the 9th JD.

I hope Mr. Stone reported the foreclosure law firm to the attorney ethics committees.

the roaches are under the rug said...

Scheiderboy has acted. Now if he delays long enough,he'll be able to protect the law firms, so they can claim to be investigated and to be cooperating, when the cooperator is Scheiderboy.

Anonymous said...

While he's at it, he should be going after the Law offices of Cohen & Slamowitz, who illegally collect on consumer debt.

Not only do they serve papers by sewer service, but they are in cahoots with the Judges in the 9th JD and get default judgments by never even having a legal proceeding.

To get this straight, they don't serve and then there is no hearing. But somehow the get judges to sign judgments and liens.

Anonymous said...

Steven J. Baum's firm had alot of cases ( still may ) in front of Certificated Judge Joseph Golia of Queens where Whistleblower Sun Ming "Sunny" Sheu died days after getting "amended" Judicial Disclosures of Judge Golia after a ten year battle over property in Queens. Does not appear Baum's firm was involved in the Sunny Sheu matter.

Baum's firm was directly involved in a Columbia County Wells Fargo foreclosure case where initially Baum's firm nor anyone in the federal building in Albany could tell an RN "where" to send her Mortgage payments while in Ch 13 including her own Ch 13 lawyer who was also on the Ch 13 Trustee's list in the NDNY.

The case only went in to Ch 13 to save the property from the Baum foreclosure which was ongoing while a Matrimonial Settlement and buyout loan was supposed to payoff Wells Fargo and the other spouse.

Instead, as the property came closer and closer to the "closing" date to complete the Matrimonial settlement while also coming closer and closer to the Foreclosure Auction date, the RN who was supposed to get the loan started getting calls from guys like "rocco" and "joey" from Westchester and Rockland counties saying somehow they had the "inside" deal on the RN's Loan up in Columbia County and knew it was going to fail but were offering to buy the property on pennies on the dollar to "help" the RN out.

While in Ch 13, the RN's own lawyer, Ch. 13 Trustee Marc Ehrlich of Troy, NY, failed to respond to Baum's papers to lift the Bankruptcy Stay which was filed just weeks after Baum's office had sent Ehrlich a letter indicating the RN could have additional time to Refinance or Sell the home. Yet, Ehrlich never communicated this to his own Ch 13 client, the RN. Instead, despite Electronic Notice of the filing by Baum defaults on Responding, defaults on notifying the RN timely and the Stay gets lifted.

Meanwhile, Erhlich's very close friend and fellow Renns County lawyer and Judge Christian Hummel becomes "visiting" Judge in Columbia County proceeding over the auction that the RN who had the "right to sell" in Bankruptcy Court was never told about happening in the State court whereupon Baum's client Wells Fargo sells the property "back to itself" undercutting the RN's Bankruptcy right to Sell and the Equity gained while making further Mortgage payments thru Ch 13.

Visiting Judge Hummel then later dismisses a state court action to make claim on the property based in part upon Erhlich's neglect and or malpractice but Hummel dismisses WITHOUT Disclosing on the Record the Conflict of Interest with Ehrlich, the Defendant. Turns out allegedly the two fellow Renss County lawyers are "so close" to each other, they watch each others children babysitting and visiting and the like but Judge Hummel apparently didn't think that was a conflict of interest to be disclosed.

Seemed as though Baum's firm was also taking some marching orders by a White Plains ( Westchester county ) law firm also doing work for Wells Fargo at the time.

Erhlich later appeared in the Albany Times Union as being part of the former Senator Joe Bruno "Dream Team" to fight Fed Corruption charges against the Senator.

Ironically, Ehrlich refused to come back in to the NDNY Bankruptcy Federal Court to explain why he did not file a Response to Baum, why he did not notify the RN in time, and why he did not make claims based upon the Equity in the property that Baum's client Wells Fargo got to buy back from itself and then "flip" again.

hvr

Anonymous said...

Look at the 'work' these creeps did for Deutsche Bank, there is fraud all over the pleace and most of it has been cover-up. Check the Judges and the campaign contributions from the lawyers that appear before them. It's the old story follow the money baby.

Anonymous said...

theyre all jews, does that make me an antisemite

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See Video of Senator John L. Sampson's 1st Hearing on Court 'Ethics' Corruption

The first hearing, held in Albany on June 8, 2009 hearing is on two videos:


               Video of 1st Hearing on Court 'Ethics' Corruption
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