As the mortgage melt down paralyzed the economy across the US and throughout New York State, one company in the center of the storm had all the business it could handle.The little-known law firm of Steven J. Baum PC, which is based in suburban Buffalo, NY, and represents dozens of banks in matters of failed mortgages, last year filed a staggering 12,551 foreclosure lawsuits in New York City and the suburbs, which works out to about 48 a day.
The foreclosure mill is one of a handful of super-regional law firms used by the country’s banks — and its lawyers appear to have practiced in every county courthouse and bankruptcy court from Staten Island to Plattsburgh and from Montauk to Niagara Falls.
But as the volume of its workload increased, so did complaints from opposing lawyers and judges that some of the thousands of lawsuits contained questionable legal work.
One bank caught in the crosshairs is JPMorgan Chase Bank, one of the largest mortgage lenders in the city.
Last month, Diana Adams, the US Trustee in Manhattan, filed papers in court supporting punitive financial sanctions against the bank for a string of bad behavior, including seeking to foreclose on homes after they rejected the attempts to make on-time payments and for failing to prove they own the mortgage on a home even as they move to seize it.
Chase filed documents that appear to be patently false or misleading, Adams said in the filing.
Although Chase has recently taken steps to address concerns expressed by courts in connection with other cases, based on Chase’s past and current conduct it needs to be sanctioned, Adams wrote.
A spokesperson for Chase had no comment on the US Trustee’s action.
The complaints against Baum — on the record during hearings, in legal pleadings and, eventually, borne out in judges’ decisions — include:
* Not divulging mortgage payments: In the White Plains bankruptcy of Blanca Garcia, Baum’s firm filed papers claiming Garcia was in arrears — when she actually made payments and showed the court her receipts, but they were not credited to her account. When Garcia’s lawyer complained, Baum’s firm answered the claim but, the lawyer said in court papers, ignored the receipts and continued to claim the mortgage was in arrears.
* Creating questionable assignments: A Suffolk County judge took it upon himself to investigate a filing by Baum’s firm when it attempted to foreclose on the home of Gloria E. Marsh. “A careful review,” the judge wrote in a four-page order, “reveals a number of glaring discrepancies and unexplained issues of substance.”
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