The same foreclosure law firm that held a homeless-themed Halloween party and has been investigated by the government for unlawful business practices has gotten a taste of its own medicine. Steven J. Baum P.C., a New York law firm that has helped process tens of thousands of foreclosures, has notified government labor departments that it will initiate "mass layoffs" and close the company altogether after completing its current assignments, HousingWire reports.
The closing of the disgraced "foreclosure mill" marks one of the latest developments in a country-wide campaign against "robo-signing" -- the practice of filing misleading or otherwise faulty foreclosure paperwork. A coalition of state attorneys general is currently negotiating what could be a $25 billion settlement with banks over foreclosure abuses that include robo-signing. And in a precedent-setting case, the Nevada attorney general recently filed criminal charges against two bank employees accused of robo-signing.
The firm's closing comes on the heels of a decision by Fannie Mae and Freddie Mac, the two government-sponsored mortgage giants that own or guarantee a majority of the country's mortgages, to stop using it to process foreclosures. The firm also recently lost the business of Bank of America and Ally Financial Inc.
The decision by Fannie Mae and Freddie Mac might be a result of the firm's involvement in various scandals, the most recent of which was the publicity about its Halloween party, which made fun of foreclosure.
In late October of last year, employees dressed in costumes that denigrated the foreclosed homeowners that they had helped boot from their homes. A photo of the party that was acquired by The New York Times captures a grime-covered staffer dressed in ragged clothes and another holding a sign that reads "3rd-party squatter. I lost my home and I was NEVER served!!" The firm considers the line a "typical excuse" used by homeowners to try and hold onto their homes, according to The New York Times.
The Halloween party certainly didn't help the firm's reputation but, then again, their standing had already taken quite a hit. The firm had been under investigation for engaging in robo-signing and in early October settled with the Department of Justice to the tune of $2 million.
Steven J. Baum P.C. is one of New York's largest foreclosure law firms, and its shuttering will reportedly put about 67 employees out of work at its Amherst, N.Y., office and about 22 at its Long Island office.
"Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices," Steven Baum said in a statement.
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