Cathey O’Donnell, Lohud.com

New York’s largest foreclosure firm, which once handled thousands of cases in the Lower Hudson Valley, will officially close Monday, but it has left a trail of questions and frustrated property owners caught in legal limbo.

The Steven J. Baum PC law firm, based in Amherst, N.Y., originally was retained for more than 600 foreclosure cases that remain active in Westchester, Rockland and Putnam. In all, Baum’s firm has handled more than 4,000 cases in the three-county region since 1999, court records show.

But last year, the firm announced its official closing, scheduled for Feb. 20, after it came under scrutiny from state and federal agencies for “robo-signing,” or mass producing foreclosure documents without verifying whether they were accurate.

“The problems Baum’s firm left this state with are just beginning,” said Susan Chana Lask, a Manhattan attorney. “The new firms taking over his files need to take time to figure out and correct what he did.”

That means homeowners face longer delays and could owe more money in accrued interest, penalties or fines while their cases drag through an already overburdened state and federal court system.

“This is a real problem,” said Derek Tarson, an attorney with the Legal Aid Society of Rockland. “I’ve really noticed it at the foreclosure settlement conferences where I have clients who show up but there’s no representative from the bank.”

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Forms New Law Firm With Former Baum Minions

Jonathan Epstein, Buffalo News

Two former attorneys from Steven J. Baum PC have formed their own Law firm in Amherst to focus on mortgage foreclosures, bankruptcies and other real estate legal matters.

Adam Gross and Amy Polowy joined with Michigan-based attorney Linda Orlans to form Gross, Polowy & Orlans LLC.

The start-up firm has already opened an office in Amherst and employs 18 attorneys and 47 support staff, having hired most from the Baum firm.

Gross Polowy has already assumed a small portion of the 50,000 cases that Baum had leftover when it announced its closure. And it plans to open another office on Long Island, mirroring the geographic footprint of the now-disgraced Baum firm.

The Amherst-based Baum firm was the state’s leading foreclosure law firm, handling more than 40 percent of cases across the state. But the firm, which had been criticized for shoddy work, lost its contracts with mortgage giants Fannie Mae and Freddie Mac after Halloween office party photos surfaced that mocked foreclosure victims.

The firm and an associated document processing firm, which had employed more than 700, including nearly 100 attorneys, announced in could close in late February.

The new firm — known as GPO—said it is working to first stress home retention as a means of distinguishing itself from firms around the state that operate on what Gross called a “race to foreclosure” model.

“We’re not calling ourselves a foreclosure firm. We’re calling ourselves a home retention firm,” said Gross, 46, a downstate attorney who has handled foreclosures since 1998.

“When you look at the array of options available to a servicer, one of them is foreclosure, but the best option is for the borrower to be able to retain home ownership and continue to make payments that are affordable.”

That doesn’t mean it won’t initiate foreclosure proceedings on behalf of its lender clients, he said. For one thing, many servicing guidelines require the foreclosure to be filed even when the borrower and lender are still negotiating a loan modification or other alternative.

Even the state’s new mandatory settlement conferences—a new requirement imposed by state lawmakers before a foreclosure can be completed — do not take effect until after the first foreclosure papers have been filed.

“A home retention, if the borrower can qualify, is the best option,” Gross said. “Anybody representing servicers should take the same approach.”

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