The New York-based foreclosure law firm infamous for their ill-themed Halloween party has agreed to fork over $4 million in a settlement with state prosecutors over tens of thousands of foreclosures it had filed.
The Steven J. Baum firm, which was New York's largest foreclosure defense firm until it shut down last November, was sued for engaging in "robo-signing" and other deceptive practices to shortcut the processing of thousands of foreclosure cases. The firm's clients included Wells Fargo, JPMorgan Chase, Bank of America, HSBC and Citibank.
"The Baum Firm cut corners in order to maximize the number of its foreclosure filings and its profits," New York State Attorney General Eric Schneiderman said in a statement. Though the firm would not admit to any wrongdoing as part of the settlement, owner Steven J. Baum and managing partner Brian Kumiega have agreed not to represent lenders or servicers in new foreclosure cases for two years, Schneiderman added.
Part of the money paid by the firm will be used to help homeowners facing foreclosure or victims of predatory lending.
This is certainly not the first time the Baum firm has drawn fire for its unsavory work practices, even outside office hours. Last October, The New York Times published pictures of the firm's Halloween party which showed staffers dressed as foreclosure victims and the homeless.
The op-ed reveals a "callous firm, eager to mock the people with whom they've helped to boot from their homes". In one image, an employee wore a cardboard sign around her neck that read: "3rd party squatter. I lost my home and I was NEVER served," making reference to what the firm considers a "typical excuse" of homeowners trying to evade foreclosure, according to The Times.
Shortly after the pictures were leaked, the firm reached a $2 million agreement with Manhattan U.S. Attorney Preet Bharara, also related to its foreclosure practices. After the settlement was announced, Fannie Mae joined Freddie Mac in dropping Baum from its lists of law firms eligible to handle foreclosures. The firm announced soon after that they would close.
The $4 million settlement is the largest foreclosure law firm settlement in the nation, according to the attorney general's office.
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