by Brian Mahany
We are not big fans of the large mortgage lenders and servicers. MERS (Mortgage Electronic Registration Systems Inc.) is pretty far down on our list too. But besides from being overworked and often not returning calls for weeks, we don’t have too many bad things to say about the law firms that represent banks in foreclosure actions. We may not like their clients but understand that the lawyers are often simply following the orders of those clients. Lately, however, some of the law firms have been getting a black eye too.
According to reports from Reuters, Stephen J. Baum, P.C. has agreed to pay $4 million to settle accusations that it improperly verified and notarized foreclosure complaints. (The Baum firm reportedly handled 100,000 foreclosure cases in New York.) The money is being paid to the New York Attorney General’s Office.
Apparently, this isn’t the first time the firm has been in trouble. Last year they reportedly paid $2 million to settle a parallel federal probe. That settlement was in early October. A few weeks later the New York Times ran a picture of a Halloween party at the firm in which were employees were dressed as homeless men and women.
Reuters says the firm closed its doors in December after Fannie Mae and Freddie Mac barred lenders from referring cases to the firm. In addition to the fines, the founder and managing partner each agreed to not represent any more lenders in foreclosure actions for the next two years.
This report comes just months after a Florida judge barred another law firm specializing in foreclosures from filing any more cases.
Actions against law firms are highly unusual. Apparently some firms became notorious “foreclosure mills” and let their quality standards drop. We recently ran into a case where the lawyer – not the lender – signed affidavits on behalf of the bank. That’s forgery and its not only wrong, its a crime.
We welcome hearing from lawyers or staff that worked for a “foreclosure mill” and know of widespread wrongdoing. Of course, we are interested in hearing from aggrieved homeowners too.
The anti-fraud lawyers at Mahany & Ertl concentrate on helping victims of fraud. Whether legal malpractice, mortgage fraud or some other type of lender liability, we may be able to help. Currently we are handling the largest false claims act case in the nation against a mortgage lender – HUD’s $2.4 billion claim against Allied Home Mortgage.
Mahany & Ertl – America’s Fraud Lawyers. Giving homeowners and victims a voice from our offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Services available in many jurisdictions.