By now, almost anyone involved in a foreclosure matter in the State of New York, as well as several other North Eastern States knows that the the “Leading” Foreclosure Firm, Steven J. Baum P.C., (“Baum”) has notified the New York State Department of Labor that it intends to terminate operations and lay off its employees. While to many, including myself, the news was sudden (and in fact, I first heard about it from The Yeshiva World News), it was not unexpected. In fact, earlier on in November of 2011, I received several notices to substitute/change counsel where Baum was the Plaintiff’s attorney to other New York firms representing the lenders in foreclosure matters.

While there were whispers, rumors and speculations that Steven J. Baum P.C.’s days were drawing to a close, no one knew for sure, not even its employees or the judges and referees assigned to foreclosure cases in the State of New York. Even as I write this column on December 1, 2011, having just left the Kings County Supreme Court a few hours ago, the Foreclosure Part A and B was full of conferences where, on the record, Steven J. Baum still appeared as the attorney of record on over 70% of the foreclosure settlement conferences scheduled to be held that day. However, unlike a mere two three weeks ago, where Baum had four attorneys in Part A and another three attorneys in Part B, this time there was only one attorney in Part B (along with an assistant that had the bad luck of only getting hired less than 30 days ago and will now have only the restrictions of non-compete agreement as “severance pay”) and that same attorney an assistant had to sit in for Part A until another Baum attorney came about two hours late.

While the causes leading to this development are many, and many borrowers who have had to deal with Steven J. Baum P.C. have their own personal horror stories, the bottom line reason for the downfall of this not-so-gentle giant was Fannie Mae’s and Freddie Mac’s notice to its servicers that, effective November 11, 2011, no new foreclosure cases may be initiated with Steven J. Baum. While I do not have any personal and verifiable information as to what percentage of Steven J. Baum’s business came from Fannie Mae and Freddie Mac, I venture to say (basing on my reviews of the Lender’s that it is/was representing) it was about 75%, if not more.

The questions know arises as to what the effect of Baum’s closure on Foreclosure proceedings will be? As I mentioned above, neither the judges, referees nor even the attorneys employed by Baum are saying what the effect will be. However, one thing is clear, the cases are not going to drop. I had several clients call me, excited as could be, asking whether with Baum’s fall their cases and nightmares are over. Sadly, I had to tell them “No”.

The worst case scenario that I can see happening is that the cases will be refiled or reviewed for accuracy by the new firms hired by Freddie Mac and Fannie Mae. While this may mean a sigh of relief for borrowers in foreclosure cases handled by Baum, the relief will only be temporary and short lived. I presume that the new attorneys hired by Freddie Mac and Fannie Mae will want to show to their new clients how they, unlike Baum, will be smarter, quicker and, bottom line, more lucrative. This will mean less delays and less ability on the part of the borrowers and their defense attorneys to shlep out the case. As such, it will be more important than ever before to be smart, educated and equipped to battle and defend a foreclosure in the State of New York.

Alexander Gofer is the managing partner of the Gofer Law Group and can be reached at 212-480-3400 ext 101 or via e-mail: [email protected]. The Gofer Law Group is a full service Law Firm with location is Long Island, Manhattan and Williamsburg, focusing Foreclosure Defense, Private Lending, Residential and Commercial Real Estate Transactions and Joint Venture Agreements.

(Alexander Gofer – YWN)