The Steven J. Baum PC firm has been banned from handling foreclosure proceedings for Fannie Mae and Freddie Mac loans. “After Nov. 15, 2011, servicers may not refer any new Fannie Mae foreclosure or bankruptcy cases in New York to Steven J. Baum PC,” said a servicing notice from Fannie Mae that day.
November 10 Freddie Mac had announced they were banning them as well. Both will allow the firm to finish proceedings in cases that were dated before those effective dates. The companies would not specify why they were banning this company from handling their foreclosure and bankruptcy processes.
In October the firm came to an agreement to pay $2 million to the U.S and adjust their practices in hopes of resolving a probe that was started into their filings. While it concluded the investigation into misleading from the firm it did not constitute any findings that the company was guilty of wrongdoing.
While Freddie Mac’s spokesperson said they do not comment on vendor relationships, a spokeswoman for Fannie Mae in Washington, Amy Bonitatibus stated “ Fannie Mae has permitted servicers to transfer existing cases from Baum firm to new counsel.” They would not comment on the situation beyond that or the servicing notice that was given.
One of the reasons for this ban may be the trouble that is brewing around this firm. There have been some serious accusations into the Steven J. Baum PC. During the housing crisis recently it has drawn in lawsuits and fines because of the way the firm handled the dealings during this time. Some of the charges include filing false documents, overcharging, and representing parties on both sides of a transfer. One New York Times column told of a Halloween party at the firm where the employees were dressed as homeowners that were foreclosed on.
Fannie Mae, Freddie Mac and other loan servicers stopped dealing with the Florida firm Law Offices of David J. Stern earlier in the year.
It seems they are not the only ones who are severing ties and dealings with the Steve J Baum PC firm.
“GMAC Mortgage no longer uses the Steve Baum law firm and began suspending its activity with that firm in September, “ Gina Proia, an Ally Financial Inc, spokeswoman said via e-mail. Officers at JPMorgan Chase would not comment on whether it uses the Baum firm.
Lawrence Grayson from Bank of America Corp. said, “We have terminated that relationship,” during a phone interview. He commented that this had happened even before the ban by Freddie Mac and Fannie Mae.
“We are evaluating and monitoring the firm and we will respond in the best interest of our customers and investors,” Vickee Adams from Wells Fargo and Co said.