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.”
The judge found that Baum filed the action before the date it claimed its client took ownership of the mortgage.
* Botched legal papers: In the bankruptcy of Matthew Austin, Baum’s firm tried to prove that its client owned the mortgage backing Austin’s house by filing
an assignment of that mortgage from a Florida company signed by an
executive of that company — but it was notarized in Buffalo, NY.
“To the extent assignor flew to upstate New York to appear
before a notary in the law offices of Steven J. Baum, PC, defies all
logic,” the lawyer said in court papers. “Clearly this is a
manufactured document intended to defraud the Court.” The bank and Austin, in hopes of settling the matter, are discussing a mortgage modification.
The Baum firm has not been found to have committed any fraud. It did not return calls for comment.
Those lawyers’ complaints appear to have gained critical traction.
Judges are taking action. A few, like Justice Jeffrey Spinner in a
widely reported case in Suffolk last November, are ripping up mortgages
and tossing entire cases brought by Baum after it couldn’t prove its
case.
Second, the US Trustee, the arm of the Department of Justice charged
with keeping the country’s bankruptcy courts free from malpractice, has
had its Manhattan office monitoring cases involving the Baum firm.
And just last month, a New York bankruptcy judge said he now has
“probable cause” to believe that lawyers for the Baum firm acted
inappropriately.
The problems involving Baum and others highlight the increasingly nasty foreclosure problem in the US after
banks started the profitable (for them) system of securitizing
mortgages and then slicing and dicing pieces of the loans and selling
them around the world. Little attention was paid to having an easy-to-use system tracking mortgage ownership. (MERS ANYONE?)
Now, as foreclosure actions clog the country’s courts, some lawyers are fighting back and asking bank lawyers or mortgage servicers to provide proof they own the mortgage.
In most instances, it can’t be done.
“In 85 percent of the cases I handle, the paperwork submitted by the
bank or mortgage service company is not in order,” said Linda Tirelli,
a consumer bankruptcy lawyer based in White Plains and Stamford, CT.
For example, she said, one mortgage servicer recently filed paperwork to prove it owned a mortgage and it said it was assigned ownership by Lehman Brothers in October 2009.
“Now everyone knows there was no Lehman last October,” Tirelli said.
For clients with aggressive lawyers, pushing back against banks —
and forcing them to realize that they can’t prove they own the mortgage
and therefore will not be able to foreclose — often result in the banks
offering a mortgage modification.
Tirelli said the case of the faulty Lehman assignment resulted in
her client getting the interest rate on her mortgage cut to 3 percent
and $15,000 being cut from her principal.
“And she was denied a mortgage modification by the bank twice before
that,” Tirelli said. “If we didn’t fight back she would have lost her
house.”
David Shaev, who also represents consumers in bankruptcy court, concurs that most claims filed by banks are defective.
“I mean as the court and everyone in the country knows, the number
of foreclosures has increased exponentially, and the volume — I think
frankly — had an impact on the quality of the work that was done and
submissions to the court,” Jay Teitelbaum, a lawyer for JPMorgan Chase
Bank, said in a Jan. 7 court hearing.
Chase hired Teitelbaum after debtors raised questions about the quality of work by the Baum firm.
Steven J. Baum, 41, took over his father’s sleepy Buffalo law
practice several years ago, moved it to suburban Amherst and
super-sized it. It now has about 500 employees, according to an ad it
placed on an online jobs site, plus has started Pillar Processing, a
legal-document processing company. Pillar, too, has gotten the
attention of judges.
One judge blasted Baum for trying to distance himself from a bad
courtroom gambit by having a non-lawyer employed by Pillar file a
motion canceling the request.
Last year, Baum filed 5,312 foreclosure actions in New York City,
according to state court online records: 2,231 cases in Queens, 1,592
cases in Brooklyn, 692 cases in Staten Island, 678 cases in the Bronx
and 119 cases in Manhattan.
One bank executive told a judge during a hearing in a Poughkeepsie
court hearing that the bank pays law firms $650 for every referral —
presumably just to file the foreclosure action. Additional pleadings
would be extra.
And Baum counts nearly every bank that provided a mortgage in The
Big Apple as a client — Bank of America, Chase, Wells Fargo, HSBC, US
Bank, GMAC Mortgage, Deutsche Bank, Sovereign Bank, Citibank, OneWest,
M&T Bank, Bank of New York Mellon, to name just a dozen, according
to court records.
While embattled homeowners with aggressive lawyers like Tirelli and
Shaev fight the banks and lawyers and end up with mortgage
modifications. most of Baum’s 5,312 cases in NYC last year were fought
against no legal opponent. Usually, delinquent homeowners can’t afford
to hire lawyers. The result is a slam-dunk win for Baum — and the
foreclosure of another house — in what amounts to a legal heavyweight
picking a fight with a 98-pound legal weakling.
There’s no telling how many houses could have been saved
from foreclosure, how many homeowners would still be in their homes and
how far down the recovery road the housing market would have been had
each embattled homeowner fought back against a broken foreclosure
system.
The case of Sylvia Nuer, a Bronx home health care aide, is one exam
ple. Nuer owns a one-bedroom Parkchester condo and moved to buy a
larger two-bedroom unit in the same building. After her lawyer, who
also represented the seller and collected a commission on the sale,
messed up some paperwork, Nuer was unable to take possession of the
larger unit.
She had to pay two mortgages on her modest salary and soon was
forced to file bankruptcy. But Nuer was lucky. She hired a lawyer and
fought the bank, which at first refused to simply take back the larger
apartment Nuer knew she couldn’t afford to pay for and not live in.
The bank filed costly motion after costly motion.
Finally, Manhattan Bankruptcy Judge Robert E. Gerber had hadenough and told the bank’s lawyer to work out a deal with Nuer.
Alluding to those fighting foreclosure actions without a lawyer,
Gerber said: “There must be hundreds, if not thousands of [Nuers] . . .
who get this stuff done to them all the time.”
Shaev, of Shaev & Fleischman, citing a recent study, said more
than 95 percent of claims in foreclosure cases are not scrutinized.
Until that changes, homeowners are going to be needlessly tossed from
their homes.
Playing with house money
JPMorgan Chase Bank, under CEO Jamie Dimon, and the law firm of
Steven Baum are drawing unwanted attention from bankruptcy judges who
are upset over how they are handling some foreclosure actions. Federal authorities are asking for punitive monetary sanctions to be levied against Chase, citing these three cases:
Case #1
Name: Christopher and Bobbi Ann Schuessler
Home: $299K Sullivan County home with $120K equity.
Wrong: Chase refused to accept payment made at bank branch, then
moved to foreclose on house after falsely claiming debtor was two
months in arrears and that no equity existed in the home.
Result: Bank backs down, pays Schuesslers’ costs.
Judge: “The system utilized by [Chase] constitutes an abuse of the
bankruptcy process.” Court’s action should “serve as warning to all
[banks].”
Case #2
Name: William R. Pawson
Home: $1.5M Midtown Manhattan Co-op with $220K mortgage.
Wrong: Chase refused online payments then went after apartment because Pawson was delinquent.
Result: Chase paid $50K to settle after Pawson complained.
Judge: “But what concerns me is, after reading Schuessler case [and]
having seen [Chase’s] papers here, it’s kind of two strikes. Three
strikes and you’re out, frankly.”
Case #3
Name: Sylvia Nuer
Home: $39K Bronx condo plus $104K second property lien.
Wrong: Chase wrongly claims it owns the mortgage to condo; its own witness couldn’t explain bank’s paperwork.
Result: US Trustee joins Nuer’s lawyer’s move for punitive monetary sanctions against Chase.
Judge: “There must be hundreds, if not thousands of [Nuers] . . . who get this stuff done to them all the time.”
Busy bees
Steven J. Baum’s law firm filed 12,551 foreclosure actions in the New York area last year.
Queens 2,231
Brooklyn 1,592
Staten Isl. 692
Bronx 678
Manhattan 119
ALL NYC: 5,312 or 102/week
Nassau 2,210
Suffolk 3,083
Westchester 796
Rockland 444
Orange 706
SUBURBS: 7,239 or 139/week
NYC & SUBURBS: 12,551 or 241/week or 48/day
Source: Official Web site, New York State Courts
richard.wilner@nypost.com
to all posters:
Don’t be shy about suing the lawyers. They have liability insurance policies; most insurers are not too keen on going into court to defend the indefensible. remember: any Pleading signed by an attorney is a “verification” that the attorney has read the document and vouches for its accuracy (some wiggle room: in some instances, and attorney is entitled to rely on the representations of his client). If the representation hings on the claim of ownership and possession of a Note, and the attorney has not seen the Note, then the attorney has problems.
Sue their pants off. When they are sitting in front of a jury, it gets delicious to see how enraged the jury is. Especially a jury that is paying on a mortgage…
And that is precisely why you get a settlement. No insurer in his right mind is going to get into that situation.
it is becoming clearer by the day that our [i use the term "our" loosely] Gov
is readily implicating itself thru their further obfuscation of the facts & documentation ,this can only lead to the conclusion of complicit parties of wall street & gov, this sets the stage for an unnerving scheme planned & executed by all of the parties in the know.
there can be no plausible denial with this.. as S Kop pointed out …
Our current situation is the very definition of “Morton’s fork” a choice between two equally unpleasant alternatives ;
This variant asserts that an unelected officer’s non-compliance with the directive of their elected officer must be due to one of two equally unacceptable causes:
1-either the civil servant [our gov] is lazy or incompetent [imo both], or
2- the civil servant [our gov] is acting willfully or maliciously [imo both] against the instructions given by his/her elected officer.[the people & constitution ]… either way its bad news!
Just so you know I have the original WET INK NOTE signed over to me, a letter stating that the loan is paid in full an even the envelope it came in …. The original lender was bought out by NETBANK and NETBANK was took over by the FDIC in SEPT 2007… My note is stamped March 2002… The FDIC refused to satisfy my loan because they went to the ROD and said they was an assignment of mortgage from the original lender to them through MERS in march 2009. I have a letter from MERS dated in 2002 that the loan was deactivated and the last known servicer was the FDIC.. Get where I’m going …. Major fraud and corruption
I filed a FOIA on MERS, was sent to the servicer, FOIA on the FDIC their legal representation refused. I have filed FOIA on the bank to no avail. I am now waiting on a response from the FRB on a complaint I filed In DEC of 2009, they have 60 days to give a response.. they have also sent me to the servicer… HUH? Please understand no one is going to let any info out. The corruption runs deep and The GOV is not gonna let anything collaspse the USA’s economic structure…
Deontos, on March 17, 2010 at 1:16 pm Said
Thanks for the information.It is very much appreciated.Best Kim Thomas
Sample FOIA request Maybe to much to ask at once. Alter at discretion.
Date
FOIA OFFICER
Agency
Address
Re: Freedom of Information Act Request
Dear Sir/Madam:
Pursuant to the Freedom of Information Act (5 U.S.C. § 552), I request that the [Agency]
produce all correspondence, memoranda, documents, reports, records, statements, audits, lists of
names, applications, diskettes, letters, expense logs and receipts, calendar or diary logs, facsimile
logs, telephone records, call sheets, tape recordings, video/movie recordings, notes,
examinations, opinions, folders, files, books, manuals, pamphlets, forms, drawings, charts,
photographs, electronic mail, origination, transfers, servicing ,credit default swaps, foreclosure actions,
loan modification documentation, etc.
Who the current creditor is, who the beneficiary is, who each investor is, who purchased securities issued from a trust. Which trust the loan is in, who each investor is who purchased securities issued from the trust.
Who each party is who has ever had ownership rights to the promissory note (and when), who each party is who has ever had ownership rights to the deed of trust (and when), who each party is who has ever had servicing rights to the promissory note (and when), who each party is who has ever had collection rights to the promissory note (and when), who is the current beneficiary of the promissory note as part of the securitization “deal” OR by an indorsement and have their rights been subsequently superseded by the rights of a credit default swap provider and/or an insurance provider.
Has any servicer or trustee advances been paid on this promissory note, has this note been paid in full and or “charged off”, is the promissory note still contained within a REMIC. Who are all the obligors on any part of the loan and/or revenue and under what conditions are they OBLIGATED to make any type of payment or any other type of OBLIGATION.
WHO ARE THE CURRENT PARTIES WHO SHOW THIS LOAN AS AN ASSET ON THEIR BALANCE SHEET. AND THE CURRENT AMOUNT THEY ARE SHOWING THE ASSET AS. Has any part of any asset listed on any balance Sheet been “marked to market”. Has any part of any asset listed on any balance sheet been reimbursed with funds from others such as federal bailouts, insurance swaps, etc. and other documents deemed relevant or related to these requests in any way.
URGENT.
Respond within twenty (20) business days:
xxxxxxxxx LOAN :
If any responsive record or portion thereof is claimed to be exempt from production under FOIA,
sufficient identifying information {with respect to each allegedly exempt record or portion
thereof) must be provided to allow the assessment of the propriety of the claimed exemption.
Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir 1973), cert denied, 415 U.S. 977 (1974). Additionally
any reasonably segregable portion of a responsive record must be provided after redaction of any
allegedly exempt material to me, as the law requires. 5 U.S.C. § 552(b).
In order to help to determine my status for purposes of determining the applicability of any fees,
you should know that I am [insert a suitable description of the requester and the purpose of the
request]. I am willing to pay fees up to the amount of $_. If the fees will exceed this amount,
please inform me before fees are incurred. I can be contacted at [include preferred method of
communication], if necessary to discuss any aspect of this request.
I look forward to receiving the requested documents and a full fee waiver within twenty (20)
business days. I
Sincerely,
Name
[Signature]
Name
P.O. Box XXXXXX
address, XX ZTP
Tel
Email
Andrew, on March 17, 2010 at 8:39 am Said:
My guess is that FOIA only work when a bank has been taken over by the FDIC. I wonder if it would work for banks who have received TARP funds though. The FOIA request could be submitted to the Treasury Dept’s TARP office.
I would say that the information should cover any bank that is FDIC Insured to surrender information on your account. This is my opinion but it seems to make sense that you have a right to it.
Hallalujah
Submitted by BMcDonald
Most of us are trying to get the info from the banks, which they will not do unless forced. Well, now many of us can walk right in through the back door. FOIA requests! I fought for 7 months to get the bank to cough up the info and it only took 6 days by going through the FDIC. So now I’m in the drivers seat. This damned bank has been lying from day one claiming they are the sole beneficiary of my loan. Now they have committed the fraud and done the crime by illegally selling my home. They are now in deep, deep, trouble.
I’ve been fighting OneWest Bank since August of last year here in Colorado. In Colorado they have nonjudicial foreclosures and the laws as so totally banker-biased it’s insane. All the bank has to do is go to the public trustee with a note from an attorney who “certifies” that the bank is the owner of the loan. What they don’t tell you is the bank has to go before a judge and get an order for sale in a 120 hearing. Most only find out about it at the last minute and don’t even show up because the only issue discussed is whether a default has occurred or not.
I discovered however that if you raise the question of whether the foreclosing party is a true party in interest or not, the court has to hear that as well. I raised that issue and demanded the bank produce the original documents and endorsements or assignements. The judge only ordered them to produce originals, which they did.
Long story short, I managed to hold them off for seven months after hiring an attorney. I found a bankruptcy case from CA in 2008 in which IndyMac produced original documents and ended up having to admit they didn’t own them. I had a letter from OneWest that only stated they purchased servicing rights. I had admissions from the bank’s attorney that there were no endorsements. And at the last minute I discovered the FDIC issued a press release in response to a YouTube video that went viral over the sweetheart deal OneWest did with the FDIC. The FDIC stated in their press release that OneWest only owned 7% of the loans they service. I presented all this to the judge but he ended up ignoring it all and gave OneWest an order to sell my home, which they did on the 4th.
About a week before the sale I went directly to the FDIC and filed a FOIA request for any and all records indicating ownership rights and servicing rights related to my loans and gave them my loan numbers. I managed to get the info in about 6 days. I got PROOF from the FDIC that OneWest did not own my loan. Fredie Mac did. And the info came directly from OneWest systems. And just last Friday I got a letter from IndyMac Mortgage services, obviously in compliance with the FOIA request that Freddie Mac owned the loan. So I now have a confession from OneWest themselves that they have been lying all along! I have a motion in to have the sale set aside and once that’s done I’m going to sue the hell out of them and their attorneys in Federal court.
So I found a wonderful little back door to the proof most of us need. If the FDIC is involved, you can do a FOIA request for the info. I don’t know if it applies to all banks since they are all involved in the FDIC. You all should try it to see.
Most of us are trying to get the info from the banks, which they will not do unless forced. Well, now many of us can walk right in through the back door. FOIA requests! I fought for 7 months to get the bank to cough up the info and it only took 6 days by going through the FDIC. So now I’m in the drivers seat. This damned bank has been lying from day one claiming they are the sole beneficiary of my loan. Now they have committed the fraud and done the crime by illegally selling my home. They are now in deep, deep, trouble.
Could you be specific in who you wrote to on this and what state and how it was sent and content of your letter.Thanks it will help many on this blog.Thanks Kim Thomas kthomas188@cox.net
Dinsfla
Thank you!
Can a FOIA be submited to Fannie Mae since they are now a taxpayer owned entity.
Richard,
Here you go:
http://www.fdic.gov/about/freedom/
DinSFLA,
http://stopforeclosurefraud.wordpress.com/
Todd
How did you file the FOIA request, and what form did you use?
I would like to do the same on my loan, since it is serviced by BoA, and they were bailed out by TARP monies.
[...] Freedom of Information Act Requests Show OneWest Bank Misrepresentation Posted on March 17, 2010 by Neil Garfield Submitted by BMcDonald Most of us are trying to get the info from the banks, which they will not do unless forced. Well, now many of us can walk right in through the back door. FOIA requests! I fought for 7 months to get the bank to cough up the info and it only took 6 days by going through the FDIC. So now I’m in the drivers seat. This damned bank has been lying from day one claiming they are the sole beneficiary of my loan. Now they have committed the fraud and done the crime by illegally selling my home. They are now in deep, deep, trouble. [...]
I sent a FOIA request 2-months ago, then had one of their attorneys call me…he stated they have no records
and I have his email to prove it! I now am having my Congressman get the federal files after signing a form for him to obtain these ‘classified’ secrets. Meanwhile I hired the best lawyer I could find, am suing SunTrust as servicer and Inlanta/FCM as lender and Gray Assoc as attorneys for treble damages (HUD allows if they refuse to modify your loans when you qualify) and as a criminal act for forgery which they are attempting to profit from. The WI Atty General may be smiling finally
as we also caught them signing the blank Note 1.5yrs
after it was closed (I’ve copies) and wouldn’t you know
the lender agent was let go just after my loan was forged … this is great detective training, but pays very little except expends anxious energies to prove liars and thiefs are just that. It would be great if we could get more local judges to read this site, become more informed and not be led by the nose by fancy bill collectors with a bank-name backing them up … after all, it damages our local communities. PS – I did call Ed Harness, he’s too busy and only works locally near Milwaukee … 3/4 of our state lacks good representation
PSS – Forgery is a crime, identity theft, credit theft and usury. It’s fraud: so why aren’t they being convicted yet?
This is all starting to remind me of a gypsy scam played in Moldova for decades … and makes me wonder if someone didn’t just sell or lose our Govt power in a card game somewhere in Moscow.
My guess is that FOIA only work when a bank has been taken over by the FDIC. I wonder if it would work for banks who have received TARP funds though. The FOIA request could be submitted to the Treasury Dept’s TARP office.