Written by Biloxi
There has been so much focus on the eight Florida foreclosure law firm that are under investigation such as Shapiro & Fishman, David J. Stern, Marshall C. Watson [Marshall C. Watson law firm recently settled with the Florida Attorney General. Click here.], etc. Well, that's has changed. We are now introduced to two foreclosure law firms in New York that are under investigation. From the NY Times:
Eric T. Schneiderman, the New York attorney general, has issued subpoenas to the state’s largest foreclosure law firm and a related company, indicating that his office has some doubts about the effort by state attorneys general to resolve questionable foreclosure practices among the nation’s top banks.
The New York investigation appears to center on two of the state’s foreclosure industry giants: the Steven J. Baum firm, headquartered in Amherst, N.Y., and Pillar Processing, a default servicing firm set up by Mr. Baum that was spun off in 2007. Representing JPMorgan Chase, Wells Fargo and other large banks, the Baum firm has handled an estimated 40 percent of foreclosure cases in the state. Pillar Processing provides extensive services to the firm.
In February this year, New York Law Journal wrote an article on Steve J. Baum law firm and the criticism of the law firm's foreclosure practices:
Back-office operations such as human resources, accounting and information technology are outsourced to Pillar Processing LLC, which Baum established and sold in 2007 to Tailwind Capital, a New York City hedge fund. Pillar occupies a separate suite in the Amherst office building where the Baum firm has its headquarters, but it and the law firm apparently have a close relationship.
In February 2008, Southern District of New York Bankruptcy Court Judge Cecelia Morris complained that Pillar had submitted papers in five cases filed by the Baum firm on behalf of four financial institutions.
"[I]n each case, Steven J. Baum, P.C. appears to have attempted a delegation of its representation of the secured creditor to 'Pillar Processing, LLC,' a Limited Liability Corporation that does not appear to be a law firm," Judge Morris wrote in In re McCourt, 05-38803. She denied all five motions and warned that she would reject future applications by "non-lawyer entities."
Another example was Judge Cecilia Morris' court filing in April 2008 where Judge Morris blasted Mr. Baum's law firm and Chase Home Finance lack of relationship identified in a letterhead filed in a court docket but shared the same address and phone number with no connection to the Christopher and Bobbi Ann Schuessler case. Judge Morris wrote:
On November 28, 2007, several months after this Court scheduled an evidentiary hearing and directed Chase Home Finance to submit the Policy Affidavit, a letter was filed on the Court docket in this case addressed to the Clerk of the Court from a legal assistant acting on behalf of “Pillar Processing, LLC,” an entity unknown to the Court that appeared to have no connection with this case or these Debtors. The letter stated:
Dear Sir or Madam:
Respecting captioned bankruptcy matter, please be advised that the 362 motion scheduled for December 7, 2007, at 10:30am [sic] has been withdrawn.
Very Truly Yours,
PILLAR PROCESSING, LLC.
By: Robin L. Brown
Legal Assistant
ECF Docket No. 23. Though no relationship was identified or explained in the body or letterhead, Pillar Processing and Chase Home Finance’s bankruptcy counsel, Steven J.Baum, P.C., share the same address and telephone number, and ECF reflects that the letter was filed using a password issued to “Dennis Jose [a Steven J. Baum, P.C. attorney] on behalf of CHASE HOME FINANCE, LLC.” Chase Home Finance’s bankruptcy counsel, Steven J. Baum, P.C., has made no effort to address or explain this act, or the propriety of this action on the record.
Finally, the Attorney Affirmation made no effort to explain the relationship between the Steven J. Baum, P.C. law firm and Pillar Processing, LLC, the non-legal entity that attempted to withdraw the Lift-Stay Motion.
According to a lawyer representing borrowers against the Steven J. Baum law firm reported in the NY Times, federal prosecutors in Manhattan also have requested information about the Mr. Baum firm’s practices. Mr. Baum is said to cooporate with NY Attorney General and admits to no wrongdoing.
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