NEW YORK (Legal Newsline) - The U.S. Attorney for the Southern District of New York announced that it entered into an agreement with the law firm of Steve Baum, P.C., one of the largest mortgage foreclosure firms in the state, to pay $2 million to the federal government and revamp its policies and procedures.
The arrangement is the result of an investigation into "filings of misleading pleadings, affidavits and mortgage assignments in state and federal courts" according to the Oct. 6 announcement.
"In mortgage foreclosure proceedings, there are no excuses for sloppy practices that could lead to someone mistakenly losing their home," said Manhattan U.S. Attorney Preet Bharara. "Homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted, and today's agreement will help minimize that risk."
Baum is prohibited from certain practices related to the Mortgage Electronic Registration Systems, Inc. ("MERS"), a subscription-based electronic registry system for lenders and other entities that tracks ownership interests in mortgages.
"Until recently, employees of Baum, with the consent of MERS, had been assigning mortgages on behalf of MERS, even though they had no connection to MERS whatsoever, which resulted in errors in its legal filings in state and federal court," Bharara said.
Baum will now be prohibited from executing any assignment of a mortgage as an "officer" or "director" of MERS. The firm also will change its foreclosure procedures.