About Me
“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Mortgages & Sub-Prime Mortgage Meltdown
Written 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.
Written by Craig D. Robins, Esq.When a mortgage company agrees to accepts a lesser amount than what is due on the mortgage, then the amount of savings can be taxed as if it were ordinary income. This is the concept of “imputed income.”
If a mortgagee forgives some or all of the balance owed on a mortgage, then the forgiven mortgage debt is taxable.
Thus, if a lender agrees to accept a payout of $100,000 on a mortgage, even though $150,000 may be owed, that $50,000 forgiven amount could be taxable as if it were regular income that the homeowner earned.
However, in 2007, Congress passed the Mortgage Forgiveness Debt Relief Act, which eliminated imputed income under most circumstances when mortgagees accepted a lesser amount. That was great news for homeowners during these past five years, enabling many hundreds of thousands of them across the country to do short sales or mortgage modifications in which the lender accepted a reduced pay-off as full satisfaction — and the homeowner had no income tax consequences.
Unfortunately, this tax break comes to an end the last day of this month, and absent any extension by Congress, consumers will be on the hook for paying income taxes on any mortgage principal reduction, beginning with mortgage reductions that occur on or after January 1, 2013.
Of course, if Congress gets their act together by preventing a fall off the fiscal cliff, this tax benefit may be extended another year, into 2014.
Incidentally, when a consumer just walks away from real estate by filing for bankruptcy, there are no tax consequences, and the consumer can discharge the full mortgage obligation without worrying about imputed income at all.
But if Congress doesn’t act soon, mortgagees will be obligated to file IRS 1099-C forms in 2013, showing the amount of canceled debt.
Written 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.
Written 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.
Written by Craig D. Robins, Esq.One of the most frustrating aspects of trying to seek a modification is dealing with the mortgagee. They will often ask for documents and then lose them numerous times. The representatives are less then helpful. The lender usually drags the process on. They don’t always act in good faith.
Today, a story in Newsday about the difficulties one family was encountering in their quest for a mortgage modification highlighted another reason why it can sometimes be frustratingly difficult to obtain a mortgage modification — sheer incompetence of employees at the mortgagee. In this case, the employee didn’t know the difference between two simple legal terms.
Newsday dedicated a full page to report on the plight of the Caceres family of Huntington Station. Mr. Geremias Caceres had been killed two years ago in a botched robbery attempt. Without his income, the family had great difficulty making the monthly mortgage payments, and to make matters worse, the value of their house dropped to $180,000 while they still owed $350,000 on the mortgage.
The surviving widow, Blanca Caceres, just spent 20 agonizing months trying to negotiate a mortgage modification with their lender, IndyMac Mortgage Services, whose corporate parent is OneWest Bank, only to be turned down.
Why did IndyMac turn them down? Because the widow couldn’t demonstrate that she was the “executor” of her late husband’s estate. However, she was the “administrator,” which for all practical purposes in the State of New York, is the exact same thing.
When someone dies, and it is necessary to probate or handle the legal affairs of an estate, a court-appointed estate representative is necessary. That legal representative is usually the surviving spouse, and Mrs. Caceres did indeed apply to the Surrogate’s Court who duly qualified her as the estate representative, a fact that she demonstrated to IndyMac.
If a decedent had a will, the legal representative is called an executor. If there was no will, the legal representative is called an administrator. Whether you are one or the other, it really makes no difference in handling the administration of an estate. It’s just a question of semantics and terminology
as to what you are called.
However, the inept employee at IndyMac who reviewed this loan mod file, did not know the difference between the two, and even though the employee knew that Mrs. Caceres was the administrator, the employee got hung up on the word, “executor.”
It appears that the Caceres family does not have an attorney who is assisting them, so Newsday stepped in, contacted IndyMac Bank, and persuaded them to re-open their file.
I should also note that I wrote a number of posts in 2009 about how Suffolk County Supreme Court Justice Jeffrey Arlen Spinner lambasted IndyMac Bank for behavior the judge called “harsh, repugnant, shocking and repulsive.” See Judge Cancels Mortgage Due to Mortgagee’s Shocking Behavior in Long Island Foreclosure Action . It seems that now, several years later, IndyMac Bank still has not yet gotten their act together.
Incidentally, Newsday also quoted me in a story about that 2009 IndyMac case: Long Island Bankruptcy Attorney Craig Robins Quoted In Newsday Article About Canceled Mortgage .
Written by Craig D. Robins, Esq.The Obama Administration’s effort to assist struggling homeowners save their homes had been widely criticized. See my post: Problems with HAMP — Too Many to Count?
Treasury Department statistics released this week show that although HAMP has helped a number of American homeowners save their homes by enabling them to permanently modify their mortgages, the number has been substantially less than the administration had hoped for.
To date, the HAMP program has helped 691,000 homeowners. This is a major disappointment from the projected goal of helping close to four million Americans with mortgage troubles. The HAMP program is almost two and a half years old.
What is very upsetting is that more than 891,000 of those who signed up for HAMP have had their modifications canceled.
One of the reasons the program has not worked as planned is because the troubled mortgage industry had great difficulty adopting procedures to adequately process the HAMP applications, leading to a great amount of frustration suffered by hapless homeowners.
I previously posted a detailed article about the difficulties homeowners in HAMP were facing. WARNING: HAMP Can Drive Homeowners Into Bankruptcy .
New York University law professor Neil Barofsky, who released testimony that he prepared for a Congressional hearing this past week, said “Treasury rushed HAMP out the door in a manner best described as ‘ready, fire, aim,’ leading to mistakes that are still ricocheting today.”
Written 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?
Also see my post: Warning: HAMP Can Drive Homeowners into Bankruptcy.
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.
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.
Also see my post: What Happens to Your House if You File for Bankruptcy?
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.
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
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.
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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.
Written by Craig D. Robins, Esq.
Filing for bankruptcy enables consumers to discharge most debts. However, when the bankruptcy laws were radically changed six years ago through BAPCPA, various homeowners associations lobbied Congress for special protection.
Accordingly, not all homeowners association fees can be eliminated through bankruptcy.
We regularly meet with clients who are seeking to walk away from their homes since the real estate is underwater and no longer worth keeping. (An underwater home is one in which the homeowner owes more on the home than what is owed to the bank). Filing a bankruptcy can enable a homeowner to eliminate any obligation on a mortgage — even for an eventual deficiency judgment after a foreclosure.
However, as Long Island is home to a number of co-ops and condominiums, we have to be especially careful with the advice we give such clients.
Homeowner association (HOA) dues and fees, commonly known as maintenance, CAN be discharged in a bankruptcy proceeding — BUT only those dues and fees owed up through the date the bankruptcy petition is filed.
Any homeowner association dues and fees that accrue AFTER the petition is filed CANNOT be discharged. This provision is set forth in Bankruptcy Code § 523(a)(16) which states that a consumer cannot discharge a debt:
(16) for a fee or assessment that becomes due and payable after the order for relief to a membership association with respect to the debtor’s interest in a unit that has condominium ownership , in a share of a cooperative corporation, or a lot in a homeowners association, for as long as the debtor or the trustee has a legal, equitable, or possessory ownership interest in such unit, such corporation, or such lot, but nothing in this paragraph shall except from discharge the debt of a debtor for a membership association fee or assessment for a period arising before entry of the order for relief in a pending or subsequent bankruptcy case.
Thus, as long as the consumer continues to own the co-op or condo, HOA fees will continue to accrue after filing, and the consumer will be responsible for those fees. This also applies to homeowners with townhouses in gated communities that have common areas and homeowners association dues.
This legal provision can create a difficult scenario if the consumer is seeking to walk away and abandon the home, especially since many lenders drag their feet with foreclosure process.
Basically, as long as the consumer continues to own the home, even if he or she does not reside there, the consumer is responsible for the post-petition HOA fees.
This means that the homeowners association can pursue the homeowner for these post-petition monthly charges, and sometimes that does happen. However, I believe most homeowners associations do not take such aggressive action and instead wait until the unit is sold at auction, at which time they deduct all outstanding HOA fees from the proceeds.
Steven J. Baum Foreclosure Firm Being Pursued with Same Laws Used to Go After Organized Crime
Posted on
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.”
I Succeed In Getting Baum Foreclosure Dismissed — and Case is Discussed in New York Times Cover StoryI 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 Times: Craig 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.
The Judge Schack Attack Against Baum — Not Only in the Twilight ZoneArthur 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).
In Another Case, Judge Schack Accuses Baum of Engaging in a Conflict of InterestIn 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.
Also see my second Baum post: Is Steven J. Baum, the Foreclosure King of New York, Worth $50 Million? .
Written by Craig D. Robins, Esq.The HAMP mortgage modification program, according to recent figures, continues to demonstrate that it is a failure.
Only one in four of the 2.7 million homeowners who sought assistance in the HAMP program actually succeeded in getting their monthly payments permanently reduced, according to a report in today’s Wall Street Journal. HAMP is the Homes Affordable Modification Program.
Most of the participants failed to qualify for the program or were disqualified after being initially accepted into the program.
I have previously reported on the abysmal results from the HAMP program — Problems with HAMP — Too Many to Count?
The WSJ article also reported that about 6.7 million homes were lost in foreclosure during the decade, 2000 to 2010. In the next three years, however, another 3.6 million foreclosure will likely occur, according to a report by Moody’s Analytics.The HAMP program has faced sharp criticism. Many Congressmen have called the program a waste of money and some Republicans are even considering a bill this week to end the program.
One of the biggest problems with the program is the number of applicants who were rejected because they did not submit the necessary paperwork, or, as is often the case, the homeowners’ mortgage companies lost the paperwork. Over a quarter million homeowners were rejected for this reason.
I can attest to meeting with numerous clients who complained that they submitted requested papers several times, only to be repeatedly told that the mortgage companies had no record of this.
Another quarter million homeowners were rejected because they were considered to have affordable mortgages. According to HAMP guidelines, the monthly mortgage payments must be more than 31% of pre-tax income. Other homeowners were turned down because they were either current (HAMP requires the homeowner to be in default) or were not considered in danger of defaulting soon.
When a client comes to us after unsuccessfully applying for HAMP benefits, we usually assist them with either bankruptcy or foreclosure defense.