Baum layoffs change foreclosure landscape

This week, Amherst, N.Y.-based foreclosure attorney Steven J. Baum announced a mass layoff of his firm’s employees. The firm, Steven J. Baum PC, filed a Worker Adjustment and Retraining notice pursuant to federal labor laws.

Several reports indicated the firm would cease doing business, but in a Nov. 21 letter to the New York State Department of Labor, Baum said the entire firm will not be closed.

“Whether it’s the death of the firm or just a significant chopping off of its legs, the Baum firm will not be what it has been over the last several years,” said Rebecca Case-Grammatico of Empire Justice Center, who represented numerous area borrowers in foreclosure cases brought by the Baum firm.

The layoffs likely resulted from the removal of Baum from Fannie Mae and Freddie Mac’s attorney foreclosure network.

“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 an announcement. “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 [layoff] notices.”

Baum settled a suit in October with the U.S. Attorney for the Southern District of New York for $2 million in response to allegations the firm filed misleading pleadings, affidavits and mortgage assignments in state and federal courts.

“In mortgage foreclosure proceedings, there are no excuses for sloppy practices that could lead to someone mistakenly losing their home,” U.S. Attorney Preet Bharara said in announcing the settlement.

“While we cannot comment on ongoing investigations, Attorney General Eric Schneiderman will continue to bring accountability to the firms responsible for the mortgage crisis, and put an end to the abusive foreclosure practices that have devastated families across the state,” the AG’s Office said in a statement.

Case-Grammatico noted that since it’s the banks that make the foreclosure decision, the demise of Baum’s foreclosure practice doesn’t mean foreclosure cases will be any less painful for those in danger of losing their home.

“A significant reason Baum had issues is when you become that large and try to streamline and factorize the practice of law and turn it into an assembly line, you’re bound to make mistakes,” she said. “My prediction is attorneys who only dabbled in foreclosure before will look at this as an opportunity for a new practice.”

Representatives of Fannie Mae-approved foreclosure attorneys Shapiro DiCaro & Barak, and Fein Such & Crane, did not return requests for comment.

Case-Grammatico said her recommendation to those facing foreclosure is the same regardless of who’s on the other side of the table: reach out to a lawyer, the lender, housing counselors and whatever help is available to negotiate through the foreclosure process.

“I think [Baum’s announcement] helps but we still have the same systemic problems in banks that want to push for as many foreclosures as possible,” said Ryan Acuff of Take Back the Land Rochester, a group opposing current foreclosure practices. However, Acuff said group members were stunned by the number of pending evictions involving Baum’s firm.

“As we examined the documents behind the foreclosures and evictions we were fighting, we found forgeries, missing data, sloppy record-keeping, misrepresentations about contact with the homeowners, failure to provide legal notice of pending actions — in sum, a slew of dishonorable and illegal means for prying homes from families and neighborhoods,” Acuff explained. “We must not allow these fraudulent foreclosures to continue eroding our neighborhoods and destroying the lives of our citizens.”

Baum did not say how many employees were being laid off, but the WARN notice is required for a layoff of between 50 and 99 workers if they make up at least 33 percent of an employer’s active workforce. The firm employed 67 full and part time employees in Amherst and 22 on Long Island.