Unable to withstand the loss of such high-profile clients as Fannie Mae and Freddie Mac, Steven J. Baum P.C., New York’s largest foreclosure law firm, is closing its doors.
The firm notified the New York State Department of Labor and other government agencies of its decision on Monday. The firm has 89 full and part-time employees at its Amherst, N.Y., and Long Island, N.Y., offices, according a statement released by the firm’s spokesman.
The firm's demise stemmed largely from a Halloween prank in 2010 that went awry.
At a Halloween office party, several of the firm's employees dressed as squatters who had lost their homes through foreclosure, and pictures showed a corner of the office decorated to look like a row of foreclosed houses. Those photographs ended up on the web site of the New York Times, where they quickly drew attention from homeowner defense groups that then asked New York’s top judge to halt any foreclosure cases the firm handled so an investigation could be launched.
Democratic Rep. Elijah Cummings of Maryland also began investigating the firm for potential improprieties, and the negative publicity led to the defection of some of its biggest clients.
"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 J. Baum, the firm’s owner said in the statement.