About Me
Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Foreclosure Defense

Mortgage Lenders Resorting to Creativity to Avoid Foreclosure on Long Island

Posted on Sunday (February 17, 2013) at 11:00 pm to Foreclosure Defense

Nassau and Suffolk County foreclosure defense optionsWritten by Craig D. Robins, viagra Esq.

Faced with a wave of judicial sentiment against them, banks have begun seeking more creative ways to resolve delinquent mortgages than rushing to foreclose against the homeowner, which for quite some time was their remedy of choice.
 
Since a great number of troubled mortgages contain toxic documents that were improperly prepared or filed, judges here in New York, especially in Queens, Nassau and Suffolk counties, have gotten fed up with many of the mortgage banks and the attorneys who represent them.
 
Consequently, the mortgage lenders have been forced to consider other options which just years ago they refused to entertain.
 
These Creative Options to Foreclosure on Long Island Include:
 
Deed in lieu of foreclosure, which is when the homeowner surrenders the property back to the lender in good condition in exchange for the lender waiving any further recourse on the mortgage.
 
Short Sale, which is when the homeowner sells the property for less than what is owed on the mortgage and the bank agrees to accept the reduced amount as a full satisfaction of the mortgage.
 
Selling Delinquent Loans to Investors.  Sometimes banks just want to get rid of the headache of having bad mortgage paper so that they can collect some cash and ascertain a specific loss for their books.  Investors who purchase these loans.  Sometimes this can help the homeowner as the investor who now owns the mortgage having purchased it at a deep discount can afford to offer the homeowner more drastic modifications.
 
Utilizing Billion Dollar Settlements. As I recently wrote, many of the major mortgage banks have entered into various settlements with the government, (see What Does the $8.5 Billion Mortgage Settlement Mean For You), in which they must provide certain financial relief to homeowners.  This can include reducing principal or even writing off entire second mortgages.
 
Our Nassau and Suffolk County foreclosure defense office is currently helping many Queens, Suffolk and Nassau county homeowners resolve their mortgage arrears by working with mortgage lenders with some of these options.  Of course, there is also the possibility of mortgage modification.
 
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What Does the $8.5 Billion Mortgage Settlement Mean For You

Posted on Monday (January 7, 2013) at 11:45 pm to Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

$8.5 Billion Mortgage Settlement for Mortgage and Foreclosure Abuse Will Help Many Long Island HomeownersWritten by Craig D. Robins, Esq.
 
It was big news today as the government reached an $8.5 billion settlement to resolve foreclosure abuse issues involving ten major mortgage banks including Bank of America, JPMorgan Chase, Wells Fargo and Citibank.
 
The settlement is broken down to give $3.3 billion to homeowners who went through foreclosure in 2009 and 2010, and $5.2 billion to troubled homeowners.  This settlement resolves a complex independent foreclosure review process that had been previously mandated by banking regulators.
 
There was another settlement last year involving the attorneys general in most states, in which mortgage bankers agreed to pay $25 billion.  However, some commentators have complained that the banks aren’t assisting homeowners fast enough with that settlement.  It is hoped that today’s settlement will provide more immediate relief to struggling homeowners. 
 
If You Were In Foreclosure in 2009 or 2010
 
Although the specifics of the settlement have not yet been fully disclosed, it appears that all homeowners who were in any stage of foreclosure during this period and suffered mortgage abuse will be entitled to compensation although those homeowners who previously sought financial reviews under the earlier 2011 federal directive may end up receiving more.
 
Even those homeowners who did not suffer any foreclosure abuse will be entitled to a small payment.
 
The settlement will not prevent homeowners from suing the lender if the homeowner feels the settlement payment does not adequately compensate the injuries.
 
One of the key objectives of the settlement is to get homeowners benefits as soon as possible and in as direct a manner as possible. 
 
A payment agent or claims administrator for the settlement will attempt to contact all eligible homeowners by the end of March 2013.
 
The guidelines for determining the amount of compensation will likely be based on guidelines released last summer which provide for increasing benefits based on the severity of the mortgage abuse.
 
It appears that there will be 11 categories of potential harm, based on the severity of the mortgage abuse. 
 
For example, failing to offer a homeowner a loan modification would be considered a lighter offense that may be worth $1,000; whereas as unfairly seizing and selling a person’s home would result in the biggest payment — as much as $125,000. 
 
 
Other Relief You May Be Entitled to As a Troubled Homeowner
 
Pursuant to the terms of the settlement, the banks must also provide $5.2 billion in mortgage relief.
 
The banks will do this by one or more of the following means:  reducing principal, forgiving debt, reducing interest rates, and permitting short sales.  There will be other types of relief as well, which is still in the process of being worked out.
 
I personally think the banks are getting away with murder for having engaged in so much grossly fraudulent and improper activity.  On the other hand, the conduct was so rampant, involving millions of homeowners, that from a practical perspective, settlements such as this may be the only way to obtain a resolution, to enable the country to move forward.
 
The best way a homeowner in foreclosure can preserve their rights and obtain the maximum amount of benefits under the settlement is to consult with an experienced foreclosure defense attorney.  Our office regularly assists clients with these matters.
 
Newsday Quotes Me In Story About Settlement
 
In its January 8, 2013 edition, Newsday quoted me about my thoughts on the settlement.  See Foreclosed to Get $8.5B From Settlement.

 

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Homeowners: Don’t Be Scammed by Forensic Audit of Mortgage Docs

Posted on Wednesday (June 20, 2012) at 1:00 am to Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

homeowners-scammed-by-forensic-analysisWritten by Craig D. Robins, Esq.
 
Unfortunately, homeowners who can barely afford their monthly mortgage payments or who are in foreclosure are in a very vulnerable position and can become easy prey for con-artists.
 
Beware of companies offering “forensic audits” and promises of obtaining new payment terms for a mortgage or a receiving a loan modification.
 
The Federal Trade Commission recently petitioned a U.S. District Court in California to shutdown a company that was allegedly offering pricey forensic audits together with claims that the company had a 100% chance that they would uncover violations of federal and state mortgage law that would entitle the homeowner to a mortgage modification or other relief.
 
A forensic audit is basically a review of various loan documents, closing papers, correspondence from the lender, and foreclosure papers to determine if the lender violated any laws in providing the mortgage or enforcing payment of it.
 
In our Long Island foreclosure defense practice, we regularly review such papers and documents to ascertain what defenses may be asserted in a foreclosure proceeding, but we do not make any promises or representations.
 
However, some unscrupulous con-artists have been setting up shop under the guise of offering a forensic loan analysis.  For over a year, the Federal Trade Commission has labeled these audits as a new twist on foreclosure rescue fraud.
 
The FTC states that these so-called auditors, for a fee of many hundreds or even thousands of dollars, use half-truths and outright lies to sell services that promise relief to homeowners in distress.
 
In particular, the FTC has said that there is no evidence that forensic mortgage loan audits will help a consumer get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.  
 
It is unfortunate, but many of our clients come to us to defend them in a foreclosure case after having been taken advantage of by one of these unscrupulous companies.  We do NOT offer forensic audits of mortgages, but do review all mortgage documents when we represent clients with defending a foreclosure on Long Island.
 
Last week the FTC effectively shut down a very large operation based in California, as well as several websites that it operated which offered bogus relief.  The companies were owned by Ryan Zimmerman and went by several names including Consumer Advocates Group Experts, LLC.  

The FTC has advice for consumers about mortgage modification and foreclosure rescue scams.  For more information see the website Your Home and the publication Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud.
 
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Future Robo-Signers Could Be Heading to Prison in Foreclosure Fraud Cleanup

Posted on Thursday (June 14, 2012) at 9:00 pm to Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

Robo-Signing may come to an end in New York if foreclosure Fraud bill is enactedWritten by Craig D. Robins, Esq.
 
Foreclosure Fraud Prevention Act of 2012 Bill Introduced Today in New York
 
The concept of Robo-Signing exploded onto the foreclosure scene about two years ago when it came to light that mortgage companies and foreclosure attorneys were taking illegal shortcuts.
 
Today, New York lawmakers introduced a bill that would make it a felony for mortgage servicer managers or their employees who commit foreclosure fraud.
 
The bill, which was drafted by New York State Attorney General Eric Schneiderman, provides that mortgage servicers who “authorize, prepare, execute or offer for filing false documents in a pending or prospective residential foreclosure action” can face up to a year in jail and a $1,000 fine.  In addition, multiple acts of robo-signing would be treated as a Class E felony punishable with up to four years in prison.
 
As a foreclosure defense attorney on Long Island, I’ve seen many families’ lives crushed when banks brought improper foreclosure proceedings against them.  We have been fortunate to have some of these cases dismissed.  This legislation offers foreclosure accountability — a concept that has been duly lacking.
 
In a press release, the Attorney General stated, “For many middle class New Yorkers, their life savings is in their home.  To take away people’s homes under fraudulent circumstances is a crime deserving of jail time.”
 
The proposed legislation imposes a very stringent duty of accountability, something which barely exists with any teeth today.  It appears that this bill, if enacted, will provide the strong criminal-law deterrent we need to prevent such abhorrent activity from continuing.
 
Robo-signing describes the process whereby mortgage companies and their foreclosure attorneys sign numerous documents in robotic fashion without verifying the facts attested to in those documents.  About two years ago, as the U.S. foreclosure crisis reached a head, it became apparent that robo-signing was a major and widespread problem throughout the country in a great number of foreclosure proceedings.  I wrote extensively about this problem previously, and my law office has successfully used this as a defense in many cases.  See Craig Robins Mentioned in New York Times Cover Story About Sloppy Foreclosure Lawyers Who Represent Lenders .  See also Boston Globe article about Robo-Signers.
 
Incidentally, Nevada enacted legislation in October which made foreclosure fraud a felony.  As a result, the number of foreclosure filings in that state dropped to almost zero while banks and their attorneys made sure their cases were clean and correct.  It would be nice to see lenders who bring foreclosure proceedings in New York make sure that there cases are 100% clean and proper at the time of filing.
 
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Massive Nassau County Mortgage Fraud Drives Victims Into Bankruptcy

Posted on Friday (June 8, 2012) at 3:00 pm to Benefits of Bankruptcy
Consumer Advice
Foreclosure Defense

Victim of Mortgage Fraud and Identity Theft Used Bankruptcy to Eliminate DebtsWritten by Craig D. Robins, Esq.
 
Victim of Identity Theft Uses Chapter 7 Bankruptcy to Put Financial Mess Behind Him
 
We recently filed a Chapter 7 bankruptcy case for an individual who was victimized in the largest mortgage fraud and ID theft scheme in Nassau County’s history.
 
Nassau County’s investigation, dubbed “Operation:  Sweet Deal,” involved more than 45 independent acts of fraud.  District Attorney Kathleen Rice indicted 17 people in March 2011 for charges ranging from enterprise corruption and first-degree grand larceny to money laundering, identity theft and conspiracy. 
 
As our client’s recent Chapter 7 bankruptcy filing illustrate, the ripple effects continue.
 
The masterminds, James Robert Sweet, 43, and Dwayne Benjamin, 44, both of Westbury, New York, lined up straw buyers, some of whom were duped, to buy homes in foreclosure claiming that such purchases would be a good investment opportunity.  However, the scheme involved purchasing the properties at a higher price than what the seller was asking. 
 
Sweet Deal underhandedly arranged to keep the difference as part of the scam.  In addition, they told the new purchasers that they would rent out the properties, collect rent from tenants, and make the mortgage payments; yet they intentionally did not make any payments.  Sweet Deal thus walked away with the profits, stole the equity in the properties, left the purchasers in the lurch.
 
How Our Client Was Duped
 
Our client was just one of those purchasers who was deceived into getting involved with the venture.  Unbeknownst to our client, after purchasing one property, Sweet Deal purchased a second and third property in our client’s name by using an impersonator.  Our client only found out someone purchased these other properties in his name after the lenders got in touch with him, saying that he was delinquent.
 
After our client cooperated with investigations by the Nassau County District Attorney and the FBI, he contacted my Long Island bankruptcy law firm to see what would be the easiest way to resolve the financial mess he was now in.
 
Chapter 7 Bankruptcy Provided an Easy Way Out 
 
Considering that he was now facing foreclosures on three properties, and also had other debt, we recommended Chapter 7 bankruptcy as a way to easily discharge his obligations (even if some of them he didn’t intentionally enter into) and get a fresh, new financial start.
 
We filed his case a number of weeks ago and recently represented him at his meeting of creditors in Bankruptcy Court where the trustee examined him and closed his case.  We anticipate that our client will receive his Chapter 7 discharge shortly, meaning that this financial nightmare will become history.
 
Although there are many ways to resolve situations where an innocent consumer incurs debt as a result of identity theft, sometimes a simple bankruptcy filing is the best option, although getting the advice of an experienced bankruptcy attorney would be most important in making such a decision.
 
Incidentally, the perpetrators of the fraud pleaded guilty to a variety of felony charges and are currently in prison.
 
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Bankruptcy Strategies for Assisting Foreclosure Clients

Posted on Thursday (October 6, 2011) at 2:00 am to Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown
Suffolk Lawyer

For Those with Mortgage Problems on Long Island, Bankruptcy Offers OptionsWritten by Craig D. Robins, Esq.
 
For Those with Mortgage Problems, Bankruptcy Offers Options
 
This post was my monthly column that was published in the September 2011 issue of the Suffolk Lawyer.  It was aimed at general practitioners and non-bankruptcy attorneys who may not be that familiar with how bankruptcy can be used to help clients with mortgage problems during these recessionary times.
 
This post should also be helpful to those consumers who are facing foreclosure and need to explore their bankruptcy options.
 
In the past two years I’ve helped a great deal of clients who were either in foreclosure or who owned homes that were very much underwater.  I am also seeing a lot of clients who have been rejected after trying to modify their mortgages, such as under the HAMP program.  Many consumers have found HAMP to be a dismal failure as I wrote in Problems with HAMP  — Too Many to Count? 
 
 
There are several bankruptcy options that can provide great relief for such clients.
 
Chapter 13 Bankruptcy
 
Consumers who have seriously fallen behind on their mortgages and who want to keep their homes, can use a Chapter 13 payment plan to cure mortgage arrears over a five-year period. 
 
However, this option is only available to those consumers who can not only afford to make their new post-petition mortgage payments, but can also make an additional monthly Chapter 13 plan payment approximately equal to 1/60th of the mortgage arrears.
 
A benefit of filing Chapter 13 is that the consumer can also resolve all credit card and medical debt as well, often paying just cents on the dollar.
 
There is a further significant benefit to those consumers who have a second mortgage that is totally underwater.  In these situations where the house is worth less than the balance owed on the first mortgage, the consumer can bring a “cram-down” proceeding and effectively “strip-off” and totally eliminate the second mortgage.   This benefit alone can often save the consumer over a hundred thousand dollars.
 
In order to qualify for Chapter 13 filing, the consumer must have a regular and steady source of income.  Some clients who would like to save their home, unfortunately cannot do so if they do not have sufficient monthly income.
 
Chapter 7 Bankruptcy
 
Chapter 7 bankruptcy enables a consumer to discharge most obligations including liability on a mortgage. 
 
When I meet with a client who has significant mortgage arrears, and whose mortgage balances greatly exceed the value of their home, I discuss the concept that it may no longer be viable to save the home.  Chapter 7 bankruptcy can provide a way out of bad, highly-leveraged real estate.  A recent study indicated that one-fourth of all U.S. homes were underwater.
 
One of the judges in the Central Islip Bankruptcy Court permits Chapter 7 debtors to cram-down second mortgages.
 
 
 
Walking Away from Real Estate
 
With these clients I often recommend a two-step process to extend their ability to remain in the home for a period of time, and to discharge their liability on the mortgage and ultimately any deficiency owed after a foreclosure sale.  It is often possible to remain in the house for one to two years or more, without paying any mortgage or real estate tax payments.
 
Assuming that you can interpose one or more genuine, good faith defenses in a foreclosure proceeding in Supreme Court, you can then prevent a default judgment and take the foreclosure proceeding out of the automatic conveyor belt type of processing, effectively delaying the process by many months, or a year or more.
 
These days there are a host of possible foreclosure defenses.  These  include bringing shoddy or defective paperwork to the court’s attention; citing issues which may indicate that the lender may not have proper standing; and identifying improper mortgage assignments.
 
By defending a foreclosure proceeding, the foreclosure process can be greatly slowed down.
 
Strategic Default
 
Sometimes I come across a client who is current on his or her mortgage, but whose home is extremely underwater.  In such instances I discuss the possibility of a “strategic default” which is when the consumer stops paying the mortgage, not because he or she can no longer afford it, but because keeping the house is no longer viable or financially worthwhile.
 
A Morgan Stanley report last year revealed that about 12 percent of all mortgage defaults are now “strategic,” which is a great increase from mid-2007, when the level was only 4 percent
 
Bankruptcy Eliminates Recourse
 
By filing a bankruptcy and possibly engaging in foreclosure defense, the consumer will have to eventually walk away from the home, but they will probably be able to stay in it for several years without making any payments – all without financial recourse from the mortgage company. 
 
There is also a strategy for timing the filing of the bankruptcy.  Although the bankruptcy filing can be done at any time, doing so at the right time will get the homeowner a few extra months in the house, as the bankruptcy stay will stop the foreclosure proceeding until the lender can get permission to lift it.
 
Although most consumers are eligible for Chapter 7 filing, they must nevertheless pass the means test which Congress imposed about six years ago.  As such, this approach should work for most consumers except those with high incomes or substantial non-exempt assets.
 
If the dream of home ownership has become a nightmare, then remember that there are bankruptcy options out there.
 
————————-
 
About the Author.  Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the October 2011 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Mastic, Patchogue, Commack, West Babylon, Coram, Woodbury and Valley Stream. (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com
 
 
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Steven J. Baum Foreclosure Firm Being Pursued with Same Laws Used to Go After Organized Crime

Posted on Wednesday (March 30, 2011) at 11:55 pm to Current Events
Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

Steven J. Baum is in the Fire

Steven J. Baum is in the Fire

Written by Craig D. Robins, Esq.

 
In March 2010, I wrote a rather detailed review of the Baum law firm as they had gained a significant amount of notoriety for not only being the largest foreclosure firm in New York but also the one most plagued by allegations of foreclosure misconduct.  See Has Steven J. Baum, P.C. Served You with Foreclosure Papers? 
 
I then provided an update with my second post about Baum in which I compared Baum, as the Foreclosure King of New York, with David J. Stern, a former foreclosure king in Florida who tumbled from grace amid robo-signing scandal.  See:  Is Steven J. Baum, the Foreclosure King of New York, Worth $50 Million?
 
Update on the Baum Firm — Foreclosure Mill Extraordinaire
 
In this post I will now provide you with an additional update on some of the ongoing trials and tribulations of the Steven J. Baum foreclosure mill. 
 
If you have been served by Baum in a foreclosure case, are in the process of litigating against that firm, or are simply intrigued, as I am, about this monster of a foreclosure factory, then read on.
 
In a nutshell, the firm has preserved its reputation for engaging in shoddy and improper foreclosure litigation as indicated in a host of court opinions, lawsuits and investigations.
 
Since my prior post about the Steven J. Baum firm, Baum has been hit with two federal class action suits, he has been sanctioned, and a Long Island judge described his conduct as “out of the Twilight Zone.”
 
new-york-times-cover-january-11-2011-with-article-about-foreclosure-lawyersI Succeed In Getting Baum Foreclosure Dismissed — and Case is Discussed in New York Times Cover Story
 
I was also successful in having the Suffolk County Supreme Court toss out a foreclosure case that Baum had brought against one of my clients and this was just reported in the New York TimesCraig Robins Mentioned in New York Times Cover Story About Sloppy Foreclosure Lawyers Who Represent Lenders.
 
In that case, Baum represented mortgagee Wells Fargo, who it turned out failed to have standing to bring the case in the first place.
 
The Campbell v. Baum Class Action Suit
 
In August, a federal class action suit was filed against the Baum firm alleging that tens of thousands of New York State homeowners were victims of foreclosure fraud orchestrated by the Baum law firm.
 
The case, Connie Campbell v. Steven Baum, MERSCORP, Inc., et. al., is pending here in the Eastern District of New York.  The case alleges that the Baum firm engaged in a bevy of improprieties worthy of being sued under RICO, which is the federal criminal statute designed to permit the authorities to punish members engaged in organized criminal enterprises. 
 
The RICO statute also permits victims of organized crime to seek redress in a civil suit for acts that are orchestrated as part of a criminal enterprise.   This class action involves that type of civil suit.  RICO’s original intended use was to prosecute the Mafia.
 
MERS Allegations Are a Chief Component of the Campbell Class Action Suit
 
In the suit, Ms. Campbell, who lost her Brooklyn home in a foreclosure proceeding that the Baum firm had brought, alleged that the foreclosure filings were false. 
 
She claimed that Baum sued her, claiming that HSBC was the owner of the mortgage.  Yet, Ms. Campbell asserts that the loan was never assigned to HSBC, but instead, was assigned to MERS.
 
MERS is a very controversial, privately-held electronic registry that does not really own a mortgage, but tracks servicing rights and ownership. 
 
I previously wrote about special defenses that a homeowner can assert to defend a foreclosure action involving a MERS mortgage.  See:  A New Powerful Mortgage Foreclosure Defense — Compliments of MERS.
 
In essence, Ms. Campbell alleged that any MERS mortgagee does not have standing to sue, and the Baum firm was complicit in bringing improper foreclosure suits.
 
She also alleged that the Baum firm was in cahoots with MERS with the robo-signing of various foreclosure documents.
 
Current Status of the Campbell v. Baum Class Action Suit
 
Since New York City attorney Susan Chana Lask commenced the suit in August, 2010, she amended it twice.  You can see a copy of the Second Amended Campbell v. Baum Class Action Complaint.   The case is Campbell v. Baum, 10-cv-3800.
 
Since the class action started half a year ago the parties have been bitterly bickering about exchanging documents and information in the discovery phase of the suit.  This has resulted in Ms. Lask having to make a number of applications seeking to have the court determine that Baum’s discovery requests were unreasonably burdensome. 
 
In other words, she has claimed that Baum is papering her to death — a grossly unfair tactic that is used to abusively smother and sidetrack an opponent while draining their resources by serving an excess of papers and demands, thereby creating unnecessary legal work.  But looking at Baum’s less-than-stellar history, perhaps that could have been expected.
 
Baum also engaged in what many believe to be the dirtiest of dirty pool — he counter-sued Ms. Lask, claiming he defamed her by discussing the suit.  Yet, in interviews that she gave to the press, she insisted that everything she said was true, based on various court decisions against Baum.
 
Another Baum Class Action Suit:  Menashe v. Baum
 
More than one attorney believes Baum has violated the rights of many.  Baum must now defend against another class action suit that is now pending in the Central Islip Courthouse of the U.S. District Court for the Eastern District of New York.
 
In November 2010, Jacob Manashe filed a class action against the Baum firm, alleging that Baum was illegally charging homeowners for attending settlement conferences.
 
This case is Menashe v. Steven J. Baum P.C., 10-cv-5155.  The attorney for that case is New York City attorney Randall S. Newman.
 
Mr. Newman sent me a copy of the complaint which you can view for yourselves.  Click Menashe v. Baum federal class action complaint.  
 
Baum Fined and Sanctioned in Nassau County Case Containing 50% Falsities
 
It seems that New York courts regularly criticize the Baum firm for shoddy, sloppy and problematic foreclosure practices.  Last year, Baum’s firm foreclosed on a Garden City home owned by Pal Raia.
 
After Baum succeeded in conducting a foreclosure sale, he sought to evict the homeowner.    However, Baum neglected to properly identify the mortgagee owner that took over the property.
 
Nassau County District Court Judge Scott Fairgrieve dismissed the proceeding in November 2010, stating, “Falsities were contained in five paragraphs out of only ten paragraphs in the entire petition.”
 
In this case, Baum’s firm was ordered to pay about $15,000 in legal fees and costs, on top of a $5,000 fine.
 
Baum Investigated for Overcharging
 
I’ve read reports that the Baum firm is being investigated by New York’s Attorney General for overcharging, filing false documents and representing parties on both sides of a mortgage transfer.
 
Judge Arthur M. Schack Twilight Zone Case with Steven J. BaumThe Judge Schack Attack Against Baum — Not Only in the Twilight Zone
 
Arthur M. Schack, a New York State Supreme Court Judge sitting in Brooklyn, has been especially vocal with his criticisms of the Baum firm.
 
In one case he called the firm’s explanations “so incredible, outrageous, ludicrous and disingenuous that they should have been authored by the late Rod Serling,” referring of course to the old, black & white classic TV show, theTwilight Zone (which I have recently been watching on the Syfy channel) about science fiction and the supernatural.
 
That case involved another improper mortgage assignment.  Judge Shack stated, “Steven J. Baum PC appears to be operating in a parallel mortgage universe, unrelated to the real universe.”
 
Judge Schack, writing in a manner that makes reading his decisions a fun and enjoyable exercise, continues, “Rod Serling’s opening narration, to episodes in the 1961 – 1962 season of The Twilight Zone, could have been an introduction to the arguments presented in support of the instant motion by plaintiff’s counsel, Steven J. Baum, P.C. – ‘You are traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination. Next stop, the Twilight Zone.'”
 
Read Judge Schack’s Twilight Zone case for yourself:  HSBC Bank USA, N.A. v. Yeasmin, 2010 NY Slip Op 50927(U).
 
Judge Arthur M. Schack has pursued Stephen J. Baum for various foreclosure irregularitiesIn Another Case, Judge Schack Accuses Baum of Engaging in a Conflict of Interest
 
In a foreclosure case last year pending in the Kings County Supreme Court, Judge Schack admonished Baum for representing two parties in the same action, which is a conflict of interest.
 
In the case, Lasalle Bank, N.A. v. Smith, Judge Schack denied the mortgagee’s motion for a judgment of foreclosure that the Baum firm had brought on the ground that they failed to provide an affidavit of facts executed by an officer of the mortgagee who had knowledge of the facts.
 
However, Schack also criticized the Baum firm for simultaneously representing both first and second mortgagees in violation of 22 NYCRR 1200.24 of the Disciplinary Rules of the Code of Professional Conduct since Baum was unable to demonstrate that his clients consented to such representation after full disclosure of the risks involved.  The slip opinion was rendered on March 22, 2010.
 
Baum in Litigated Divorce Proceeding with Spouse
 
Upon searching for various Baum foreclosure cases, one other interesting case turned up:  Baum v. Baum
 
It appears that Baum is involved in a heavily litigated divorce case pending in upstate New York before Judge John O’Donnell who recently ordered Baum to pay pendente lite support.
 
More About Baum to Come
 
I’ve also prepared a rather lengthy and detailed list of various decisions that New York judges have issued in various Baum foreclosure cases, most of which have highlighted various irregularities and sloppy conduct on the part of the Baum firm.
 
I am hoping to assemble that for a future blog post.
 
This Post About Steven J. Baum Is Merely a Follow-Up — See My Prior Posts for Lots More on Baum’s Bumbling
 
If you think the above is something, you must see my first Baum Post from 2010 About the Stephen J. Baum Foreclosure Mill
 
 
 
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Craig D. Robins and Long Island Bankruptcy Blog Mentioned in Washington Post Article About Judges Becoming Intolerant of Mortgage Lenders in National Mortgage Debacle

Posted on Thursday (March 10, 2011) at 6:00 pm to Foreclosure Defense
In The News

washington-post-300x270Written by Craig D. Robins, Esq.
 
I previously mentioned that I’ve been a little slow in writing posts about some national-level periodicals that have quoted me on various bankruptcy and foreclosure issues.
 
I’m pleased to say that on November 9, 2010, the Washington Post published an article written by their staff reporter Ariana Eungung Cha, who has been regularly covering national news about foreclosure improprieties committed by big mortgage lenders and their foreclosure attorneys.
 
The article discussed the recent revelation last fall that many foreclosure cases across the nation were based on improperly executed robo-signed mortgage documents.   
 
As New York had become a hotbed of cases in which judges have expressed their frustration with mortgage lenders who are reckless with their litigation, she asked for my comments.
 
She also highlighted the noteworthy and highly-publicized decision of Long Island Judge Jeffrey Arlen Spinner, who tossed out a mortgage because he felt that the mortgage lender wasn’t playing fair with its legal obligation to work out a resolution with the homeowner in good faith.  See Judge Cancels Mortgage Due to Mortgagee’s Shocking Behavior in Long Island Foreclosure Action .
 
 Long Island Bankruptcy Attorney and Foreclosure Defense Lawyer Craig D. Robins, Esq. Quoted in Washington Post 
 
Click to see “Some Judges Chastise Banks Over Foreclosure Paperwork” on the Washington Post website, or read the the article below:  
  
 
Some Judges Chastise Banks Over Foreclosure Paperwork
 
Washington Post Staff Writer
Tuesday, November 9, 2010

 

EAST PATCHOGUE, N.Y. – A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company’s paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so “repugnant” that he erased the family’s $292,500 debt and gave the house back for free.

The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation’s biggest lenders, who say it could establish a dramatic new legal precedent and roil the nation’s foreclosure system.

It is not the only case that has big banks worried. Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders.

Their decisions illustrate the central role lower court judges will have in resolving the country’s foreclosure debacle. The mess came to light after lawsuits and media reports showed lenders were routinely filing shoddy or fraudulent papers to seize the homes of borrowers who had missed payments.

In millions of cases across the United States, local judges have wide latitude to impose sanctions on banks, free homeowners from their mortgage debts or allow the companies to proceed with flawed foreclosures. Ultimately, the industry is likely to face a messy scenario – different resolutions by courts in all 50 states.

The foreclosure dismissals in this area of New York have not delivered free homes for borrowers. With so much at stake, lenders in this part of New York are aggressively appealing foreclosure dismissals, which is likely to keep the legal system bogged down, foreclosed homes off the market, and homeowners like the Yano-Horoski family in legal limbo for years.

“We believe the Yano-Horoski ruling, if allowed to stand, has sweeping and dangerous implications for the entire mortgage lending industry,” said OneWest Bank, the family’s mortgage servicer.

The situation in Suffolk and Nassau counties on Long Island and Kings County in Brooklyn- which have among the highest rates of foreclosure in the state and where the 81 judges handling foreclosures have become infamous over the past few years for scrutinizing paperwork for errors – provides a window into how the crisis could unfold across in the country.

While the level of tolerance for document mistakes varies from judge to judge, the group as a whole has a reputation for ruling against mortgage companies when paperwork issues or other problems arise. At least one bank, J.P. Morgan Chase, requires document processors to separate foreclosures cases from these three counties from those in the rest of the country. A high-ranking executive of the company is specially assigned to sign off on the area’s foreclosure filings.

Judge Dana Winslow of Nassau County says he’s thought a lot about why judges in his area are more apt to question filings. He said it comes down to one thing: Lack of trust for Wall Street. In this region, judges have seen a lot of inaccurate filings from the financial sector.

Trust “of the lending institutions and Wall Street has eroded in some areas of the country more than others,” Winslow said.

Craig D. Robins, a foreclosure defense attorney who authors the Long Island Bankruptcy blog, said of the Yano-Horoski case: “I think we’re going to see more decisions like this across the country. Many judges are finding their court calendars clogged with cases that have all these flaws in them that never should have been brought in the first place or should never have been brought without more due diligence.”

Going forward, mortgage companies trying to foreclosure in the state of New York will face stiffer requirements. On Oct. 20, the state’s chief judge said attorneys for lenders will have to vouch personally for the accuracy of documents.

“We can’t have the process being a fraud,” New York State Chief Judge Jonathan Lippman said in announcing the new procedure. “It has to be real and based on credible information.”

Even before Lippman’s order, however, lower court judges were already raising questions about faulty paperwork in foreclosures.

On June 17, for example, Judge Karen Murphy of Nassau County ruled that Wachovia Bank lacked standing to foreclose on a home because the document used to prove ownership of the mortgage was incomplete.

On Sept. 21, Judge Peter Mayer of Suffolk County delayed a foreclosure by Ally Financial’s GMAC mortgage unit after noticing that the paperwork transferring the mortgage to the bank was dated two days after the foreclosure was initiated.

And on Oct. 21, Judge Arthur Schack of Kings County dismissed a OneWest foreclosure motion because the bank had not adequately documented how the mortgage had been sold and resold to investors. He also questioned why the employee who signed many of the documents claimed to be a vice president of several different mortgage companies at the same time.

In a different case in May, Schack ruled that HSBC Bank could not foreclose on a home because the paperwork that assigned the mortgage to HSBC from the original lender, Cambridge, was “defective.”

That didn’t mean the borrower, Lovely Yeasmin, a 28-year-old cashier who immigrated from Bangladesh, got her three-story townhouse in Brooklyn’s Bushwick neighborhood for free. Wells Fargo, the mortgage servicer for HSBC, has not appealed the case. Instead, it has offered to temporarily lower her monthly payment from $4,700 to $3,000.

Yeasmin’s eldest brother, Mohammed Parpez, 35, said that before the judge’s order, Wells Fargo was resistent to a loan modification. “The banks are crooks. They tell everyone they are trying to help people like us, but they are really doing the opposite,” Parpez said.

Tom Goyda, a Wells Fargo spokesman, said that although the company “disagrees with the court’s findings,” it is continuing to try to work out a longer-term solution with the family.

Members of the Yano-Horoski family said they struggled similarly to get their lender to modify their loan after Greg Horoski fell ill in 2005 and his online business selling specialty dolls suffered. After he underwent a triple bypass surgery, two stents and two hip replacements, he and his wife, Diane – who teaches an online English composition course – found themselves unable to pay the bills.

Despite his pleas, Horoski said, he failed to get OneWest to come to an agreement, even though he became able to pay the debt after his company’s sales picked up.

In his November 2009 ruling, Judge Spinner of Suffolk County blasted OneWest for negotiating with an “opprobrious demeanor and condescending attitude.” He also cited the bank’s “duplicity” in offering a forbearance agreement with a deadline that had already passed and for presenting contradictory paperwork claiming different amounts for what the family owed.

With their case under appeal, the Yano-Horoskis now find themselves in a tricky position, wary of putting more money into a house that an appeals court could take away from them. While the other houses on their quiet suburban street are meticulously maintained, their front-porch light remains shattered and the paint on their house is peeling.

They’ve shelled out $3,000 for a new hot-water system. They paid $2,000 for tree trimming after a neighbor complained. But they’ve let the $10,000 property tax bill become delinquent, and they worry an appeals court could not only reverse the earlier ruling but demand that the family pay back the mortgage for every month that has passed since.

Nonetheless, Horoski remains optimistic.

“People thought people who didn’t pay their mortgages were automatically deadbeats,” he said. “People are educated now. They are realizing all of a sudden how many hundreds of thousands of these homes that were foreclosed may have been done so with fraudulent documents.”

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Craig D. Robins Quoted In Daily Finance Article

Posted on Wednesday (March 2, 2011) at 4:00 am to Foreclosure Defense
In The News

Craig D. Robins, Esq. quoted in Daily Finance article about foreclosure defense
 
Written by Craig D. Robins, Esq.
 
Because I’ve been so busy representing clients these past few months, I’ve been a little slow in commenting on some national-level periodicals that have recently quoted me on various bankruptcy and foreclosure issues.
 
On October 25, 2010, Abigail Field, writing for Daily Finance, discussed New York’s new rules for requiring attorneys to verify information presented to the court in foreclosure cases.  In her article, “What’s the New York State of Mind for Foreclosures Now?” I commented on the impact that this new law will have.
 
 
Click here to see the Daily Finance article:  What’s the New York State of Mind for Foreclosures Now?
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Craig D. Robins Quoted in Long Island Business News Article About MERS Mortgage Mess

Posted on Tuesday (February 15, 2011) at 9:15 pm to Foreclosure Defense
In The News

 

Craig D. Robins featured in Long Island Business News ArticleBelow is an article about the highly-controversial MERS — the Mortgage Electronic Registration System — which has been negatively featured in national news over the past year for contributing to the foreclosure woes of millions.  A number of my quotes are featured in the article which appeared in Long Island Business News in its January 26, symptoms 2011 edition.

The major issue with any MERS mortgage is whether the mortgagee has standing to commence a foreclosure proceeding.  See  A New Powerful Mortgage Foreclosure Defense — Compliments of MERS .

Here is the article:
 

Critics Question a Digital Financial System Web

by LIBN Staff
Published:  January 26, ask 2011

The lending industry launched the Mortgage Electronic Registration System in 1997 to be a centralized database to streamline the transfer of home loans among investors while making it easier for borrowers to keep track of who owns their loans.

But the system’s critics say the industry got it only half right: Loans are being transferred electronically between investors at such an alarming pace – and with so little governmental oversight – that homeowners often cannot discover the current loan owner’s identity.

This difficulty results, doctor in large part, from a legal fiction in which MERS registers as the nominal mortgagee in county land records offices. Loan transfers under the mortgage are not similarly recorded and “transparent” but are instead handled through the electronic database.

The true lender comes to light only when foreclosure proceedings begin, when MERS reassigns the mortgage in land records to the lender, critics say. “Mortgages seem to be bought and sold at such a dizzying pace on the secondary mortgage market that frequently a plaintiff  mortgagee is no longer the proper party by the time the foreclosure is served,” said Craig Robins, a Woodbury-based attorney and writer who specializes in bankruptcy law.

But MERSCORP President R.K. Arnold said the MERS database, which his company operates, makes it easier for borrowers to track the current owner of the loan.

He referred to written testimony he gave in November to the U.S. Senate Banking, Housing and Urban Affairs Committee as part of its examination of the mortgage serving industry.

“MERS helps the mortgage finance process work better,” the written testimony said. “The MERS process of tracking mortgages and holding title provides clarity, transparency and efficiency to the housing finance system. We are committed to continually ensuring that everyone who has responsibilities in the mortgage and foreclosure process follows local and state laws, as well as our own training and rules.”

Robins noted that MERS, of course spins toward the positive for his company. “Although MERS claims its process is efficient, we can see that’s not the case because of all the sloppiness that’s been exposed in the way they maintain their records,” he added.

In response to claims that MERS is not a valid mortgagee, MERSCORP’s president told the Senate panel that the company clearly notes on mortgage documents signed by the borrower at closing that MERS is the mortgagee. The document is then recorded in the public land records, Arnold said in written testimony.

The lenders, under their membership agreement with MERS, state that the system serves as the mortgagee of record with regard to each loan, he added.

“What MERS does is eliminate the expense of repeated assignments, resulting in lower cost for lenders when they sell the loans … to investors,” Arnold added. “When the note is sold, MERS continues to act as the mortgagee for the new note holder because the mortgage interest follows the note when it changes hands.”

Despite this assurance, and even in the absence of a court ruling or legislation, title insurers might grow leery of underwriting home sales involving properties in which the MERS database was the mortgagee. Title insurers feel more comfortable with paper documents attesting to the ownership of property and loans. One reason for title insurers comfort level with paper is it’s easier to document a complete chain of title, assuming the mortgage instruments are properly prepared, Robins noted.

Critics of MERS say the electronic database has also enabled banks to avoid paying county recording fees whenever they assign a loan.

The banks need not record the loan transfers because on paper the same company, MERS, retains the mortgage.

University of Utah law professor Christopher L. Peterson, a critic of MERS, said the practice shortchanges counties and is presumably illegal in many jurisdictions, testifying last month before the House Judiciary Committee as it examined causes and effects of the foreclosure crisis.

Peterson, in an interview, said state lawmakers should consider passing legislation that would require mortgages and loans to be recorded with land records officials to ensure proper chain of title.

Such legislation would combat the mortgage industry’s “cavalier documentation practices” under which MERS is “pretending to own the mortgage,” Peterson said.

MERSCORP’s Arnold, in response to Peterson’s criticism, referred once more to his written Senate testimony.

“We take our role as a mortgagee very seriously and we see our database as a key to moving toward better access to information and transparency for customers,” the testimony said.

Robins sees big trouble ahead unless fundamental questions are resolved. “Until there’s some kind of resolution of the problems MERS has created, we’ll certainly see an increasing number of attorneys who are raising MERS defenses to foreclosure proceedings,” he said. “However if this is left unabated, the MERS problem will spiral out of control.”

This story originally appeared in LIBN’s sister paper, The Daily Record.

 
Long Island Business News, a weekly, is Long Island’s only publication devoted to local commerce and has been the premier source of news and data on Long Island business, economic trends and the region’s entrepreneurial sector for more than 50 years.
 
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Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »

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