Controversial Law Firm Faces Congressional Scrutiny

WASHINGTON — Democratic Rep. Elijah Cummings is looking for evidence of potential improprieties at a controversial New York law firm that represents banks in foreclosure cases.

The firm, Steven J. Baum, P.C., of Amherst, N.Y., faces congressional scrutiny following the recent publication in the New York Times of photos from the law firm's 2010 Halloween party, where party-goers dressed up as homeless people and mocked their plight.

Cummings, the top Democrat on the House Oversight Committee, sent a letter Friday to the New York law firm asking for all documents related to false or misleading foreclosure documents, robo-signed documents, attempts to foreclose on borrowers who were attempting to get loan modifications, and instances of overcharging on foreclosure fees, in addition to communications about the 2010 Halloween party.

On Oct. 6, 2011, the U.S. Attorney's Office for the Southern District of New York announced that it had entered into a $2 million settlement agreement with the Baum law firm in connection with its foreclosure actions.

According to the U.S. Attorney's Office, the Baum law firm acknowledged 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."

Cummings seized on those charges in his letter.

"Given that your firm represents some of the nation's largest mortgage servicers, including Citigroup, JPMorgan Chase, Bank of America, Wells Fargo, GMAC Ally, and HSBC, these revelations are disturbing," Cummings wrote in the letter. "If true, they demonstrate a culture of disdain for families suffering foreclosure and a disregard for the rule of law."

Cummings' letter did not include a subpoena - Democrats on the House Oversight Committee do not have the authority to issue subpoenas on their own - which means that the Baum law firm is not required by law to comply. If the firm does not provide the requested documents, Cummings could seek Republican cooperation on a subpoena.

Earl Wells, a spokesman for the Baum law firm, said late Friday afternoon that Baum had just received the letter and was in the process of reviewing it with his lawyers.

Cummings has been interested in the conduct of law firms that specialize in foreclosure cases since at least February, when he asked the Federal Housing Finance Agency's inspector general to launch an investigation related to firms hired by Fannie Mae and Freddie Mac.

That investigation found allegations and evidence of foreclosure abuses by law firms as early as 2005.