Tuesday, November 22, 2011

NY Foreclosure Mill To Shut Down; Loss Of Fannie, Freddie Business Over Dubious Practices Dooms Controversial Sweatshop

In Buffalo, New York, Buffalo Business First reports:

  • The embattled Steven J. Baum P.C. law firm is the closing its doors after a series of missteps that included mortgage industry giants Freddie Mac and Fannie Mae cutting off business with the Amherst-based firm.

  • Baum has filed a Worker Adjustment and Retraining Notification notice with several government agencies, saying it plans on shutting its doors. The firm has 67 full- and part-time employees at its Northpointe Parkway offices and another 22 full- and part-time workers at its Long Island office.

  • We will fulfill all of our obligations under WARN and during this process we will also fulfill our remaining work on behalf of our clients,” Baum said in a prepared release. "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.”

  • The Baum agency focused on real estate foreclosure transactions. The firm has been under fire from federal agencies and the public, including members of the local “Occupy” movement, for its alleged business practices.

  • Last month, the Baum firm settled a federal claim relating to alleged mishandling mortgage filings on behalf of his clients. Baum agreed that the firm would pay $2 million in fines and promised to change business practices at the firm.

  • The Baum agency was also working under a cloud of suspicion concerning allegedly misleading pleadings and affidavits, some of which led to people having their homes foreclosed under what was deemed unfair circumstances.

  • The New York Times also ran a photo of Baum employees dressed and apparently mocking homeless people during a company-sponsored Halloween party.(1) The photo attracted national attention, drawing criticism.

  • But, the largest blow came on Nov. 10 when Freddie Mac and Fannie Mae cut off all business with the Baum firm because of its business practices.

Source: Baum law firm to close.

(1) See Joe Nocera: What the Costumes Reveal (October 29, 2011).

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