MANHATTAN (CN) - Federal prosecutors said one of the biggest mortgage foreclosure law firms in New York state, Steven J. Baum P.C., will pay $2 million and "extensively change its practices with respect to mortgage foreclosure actions" to settle a federal complaint that it 'filed misleading pleadings, affidavits, and mortgage assignments in state and federal courts in New York."
The 12-page settlement agreement "specifically prohibits Baum from engaging in certain practices related to the Mortgage Electronic Registration Systems" the U.S. Attorney's Office said in announcing the deal.
The prosecutors' statement added:
"Under the terms of the Agreement, Baum has agreed to:
"Take steps to inform courts of the nature of the assignments in pending foreclosure proceedings it is handling;
"Obtain appropriate affidavits from its clients attesting to the fact that they possess original notes or have conducted a diligent search and the original note could not be found;
"Have experienced attorneys supervise the preparation of pleadings, and review and approve pleadings before they can be filed;
"Implement a 12-24 month training program for its attorneys that includes an overview of the foreclosure process in New York State and a review of the litigation procedures expected at Baum;
"Provide immediate notice to the government when objections are raised regarding the accuracy of certain court filings related to mortgage foreclosure proceedings; and
"Maintain documentation of its compliance with the settlement.
"In addition, the agreement requires Baum to pay the United States $2 million in exchange for a release from any potential claims pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. ... The release from liability does not preclude any other parties, including individual homeowners, from pursuing any rights they may have."
The U.S. Attorney's Office added: "The agreement does not constitute a finding by any court or agency that Baum has engaged in any unlawful practice or wrongdoing. In the agreement, Baum acknowledges, however, that it occasionally made inadvertent errors in its legal filings in state and federal court, which it attributes to human error in light of the high volume of mortgage defaults and foreclosures throughout the State of New York in the wake of the national subprime mortgage crisis."
The agreement is with Baum P.C., of Amherst, N.Y., and Pillar Processing LLC, a state-licensed professional employment organization that provides Baum with administrative services.
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