Monday, October 10, 2011

NYC Feds Squeeze Foreclosure Mill Sweatshop For $2M In Fines, Agreement To Revamp Practices In Probe Into Filing Of Allegedly Misleading Pleadings

In New York City, the New York Law Journal reports:

  • One of New York state's biggest foreclosure law firms will revamp its practices and pay a $2 million fine to settle a six-month probe by the Southern District U.S. Attorney's Office that found it had filed misleading pleadings, affidavits and mortgage assignments in state and federal courts.(1)

  • In a settlement agreement announced yesterday, the firm, Steven J. Baum, P.C., of Amherst, will implement a series of internal controls including a pledge not to bring foreclosure actions without reviewing the original promissory notes or reviewing a copy of the note from its client or custodian of the document.

  • The thrust of that condition is similar to an order issued almost a year ago by Chief Judge Jonathan Lippman directing lawyers for lenders to file an affirmation that they have taken reasonable steps to verify the accuracy of papers they file to support residential foreclosures (NYLJ, Oct. 21, 2010).

  • The 12-page agreement also prohibits the firm's employees from executing mortgage assignments as officials or representatives of MERS, an electronic mortgage registry system.

  • "In mortgage foreclosure proceedings, there are no excuses for sloppy practices that could lead to someone mistakenly losing their home," Southern District U.S. Attorney Preet Bharara said today in a statement. "Homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted, and today's agreement will help minimize that risk."

For more, see Upstate Foreclosure Firm Fined $2 Million, Agrees to Overhaul Its Filing Practices.

For the U.S. Attorney press release, see Manhattan U.S. Attorney Announces Agreement With Mortgage Foreclosure Law Firm To Overhaul Its Practices And Pay $2 Million Fine.

(1) Apparently, not everyone's happy with the settlement. See New York Post: Critics: Feds went easy on NY's largest foreclosure mill.

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