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Closing of Baum PC could lead to Business for other Firms
As reported earlier, the foreclosure law firm of Steven J. Baum PC is shutting down after filing notice with federal labor regulators regarding massive layoffs. The layoffs will occur on February 20 but it is unknown if the firm will release all 67 full and part-time employee. The firm also employs 22 people at its office on Long Island.
“At one point, Steven Baum was happy to announce that he was the largest foreclosure firm in New York state,” said Rebecca Case Grammatico, an attorney at the Empire Justice Center. “If you work in the foreclosure universe, you know who Baum is. It is big news to have such a large player in the field unravel.”
One of the main reasons that the firm is closing is because Fannie Mae and Freddie Mac banned lenders from referring new foreclosure cases to Baum PC. The firm has suffered through federal and state investigations over the past couple of months to go along with Halloween photos surfacing of staff members dressed as the homeless. The closing of Baum PC could cause a lot of problems for the state of New York, especially since they handled 37 percent of all cases in 2010.
April Newbauer, attorney-in-charge of the Queens, New York, office of the Legal Aid Society, said “My clients are very concerned about delays in the case and I am concerned for homeowners who continue to have interest charges accrue against them while time ticks by.”
“We don’t know whether the firm will continue to vigorously represent their clients with the same ratio of lawyers-to-cases, which was already very problematic,” Newbauer said. “We’re concerned they’re going to lay off people and have the remaining lawyers handle even more cases.”
The firm had to make a $2 million payment and pledge reform for its foreclosure practices because of complaints about human error in its cases.
“I think that when you have that assembly-line approach to law, it’s much easier to make mistakes,” Grammatico said. “The diligence and quality decreases.”
For some, this is excellent news throughout the state of New York because foreclosure firms will be acquiring the overload work from Baum PC. The one problem some of these firms will come in contact with is that only a couple of firms have the seal of approval from Fannie Mae and Freddie Mac. In conjunction with the Federal Housing Authority, Fannie Mae and Freddie Mac guarantee roughly 90 percent of all mortgages in the United States.
Some foreclosure firms that could step in to take some of the Baum PC cases include Rosicki and Rosicki Associates, Fein, Such, and Crane and Stein, Weiner & Roth.
“Who knows how this is ultimately going to spin out,” Grammatico said. “There are still a lot of pieces of this puzzle to be figured out.”Closing of Baum PC could lead to Business for other Firms by Jim Vassallo