On August 17, 2010, attorney Susan Chana Lask filed a Federal Class Action Complaint on behalf of tens of thousands of New York State homeowners who lost their homes to an alleged foreclosure fraud orchestrated for years by a New York “foreclosure mill” attorney and major mortgage companies.
The case is filed in the US District Court, Eastern District of New York, entitled “Connie Campbell against Steven Baum, MERSCORP, Inc, et al.”, Case #10CV3800. It alleges RICO civil racketeering, RESPA, Fair Debt Collection Practices Act violations and that homeowners paid inflated foreclosure and other fees fictionalized by Mr. Baum who profited from the scheme since 2005.
The action seeks to return tens of thousands of foreclosed homes to their owners or the values thereof and hundreds of millions in punitive damages against Mr. Baum, MERSCORP and HSBC.
Attorney Susan Chana Lask discovered the alleged foreclosure scheme after her client lost her 1.7 Million Dollar Brooklyn Caroll Gardens Brownstone home to a $190,000 mortgage foreclosure filed by attorney Steven Baum for HSBC. The foreclosure court filings were false as filed in HSBC v. Cncepcion Campbell, et al, New York Supreme Court, Kings County, Index #20393/07 .
Steven Baum’s foreclosure complaint he filed was for HSBC against Ms. Campbell . It admits the loan was never assigned to HSBC, yet he sued for HSBC. A later Satisfaction of Mortgage was not filed for HSBC but for a company named MERS, admitting HSBC never owned the loan and the foreclosure complaint should have never been filed in the first place. The actual Mortgage was always in MERSCORP’s name and never assigned as required by law. Just who owns the loans Steven Baum forcloses on is a deliberate mystery and potentially tens of thousands of New York homeowners lost their homes on a mystery.
But there’s more. The documents filed in the Courts are signed by attorneys from Mr. Baum’s office under penalty of perjury that they are filing with knowledge of the transaction; however, they have no knowledge as they admit they do not have the documents they attest to in their office. In fact, in the later case filed of Concepcion Campbell v. Walendowski, et. al., New York Supreme Court, Kings County, Index # 08-3467, when Ms. Lask subpoenaed Mr. Baum’s firm for the original Note, they responded it was not needed and refused to produce it; implying they never had it yet they swear they reviewed it in their court filings “under penalty of perjury.”
Also, in the original foreclosure case of HSBC, they file documents by an alleged officer of MERS named Rebecca A. Cosgrove by a notary in “Erie County”. But MERS is located in Virginia and Erie County is in Buffalo New York where Steven Baum’s office is. It is suspect that Ms. Cosgrove is even an officer of MERS, no less that she flew all the way to Buffalo NY for the day just to sign a document before a notary. In fact, other courts recently discovered these same false notaries and “officer” claims in other cases involving Mr. Baum and MERS.
“Mr. Baum is an attorney who knows better, yet his foreclosure filings for parties who have no standing to sue confuse the courts and homeowners while he and his banking clients profit tremendously by throwing people on the streets after their bad loans sold by the very same banks become unaffordable to innocent people.”, says Susan Chana Lask.
The aforementioned false foreclosure filings potentially hit tens of thousands of New Yorkers who were foreclosed upon. “Courts have rules and laws are made to be followed. Corporate America needs to follow the rules and be accountable just like the rest of us, else we’re all victims to one big Bernie Madoff scam,” says Lask.
Courts blast Mr. Baum for his sloppy filings claimed to be deliberate to hasten foreclosures on unwitting homeowners and courts. On July 29, 2010 NY County Supreme court Judge Alice Schlessinger summed up a MERS foreclosure as “I am unable to say with any confidence that this was an honest transaction.” (Index #109824/05). The Manhattan US Trustees office started an investigation of Steven Baum months ago.
Not sure if you all read this one yet, but here’s the link to the (lengthy) deposition of a paralegal who worked at the Law Office of David J Stern in Florida (a foreclosure mill).
Deposition of Tammie Lou Kapusta
Quite eye-opening to the very shading legal practices and why the title could be clouded on many properties.
Yes, it’s a long document but well worth the hour or so. (I found it easiest to read in full screen mode.)
Net result of this: Free houses for everybody! Wheeeeee!
This morning (Thursday) the big bank stocks are being hit by the foreclosure issue – one WSJ analyst seems to think that “principle reduction” will be the ultimate outcome. None of this is good for the real estate market, but it looks as if this may be the last act of a now five year crisis. Principle reduction is a two edge sword – on the one hand it could keep people in their houses, and take them off the foreclosure list, but on the other hand, it would set lower prices for homes across the board. If a bank lowers principle on a 500K home to 300K, then all other homes similar would appraise for only 300K.
Bottom line – looks like prices will stay depressed for a long time. . .but with salaries depressed and unemployment still high, maybe not a bad thing – seems like this recession was the “reset” button.
I just had a crazy thought. Can we make Right to Rent a way out of this mess? I’m not thrilled with the Right to Rent idea, in general, I’ll admit, but if upon agreeing to rent for five years, the homeowner signs over the property . . . does that get clean title from there bypassing the whole MERS mess, at least for that house?
Everyone fears Right to Rent will cause an avalanche of defaults, but if it leads to clean title, that would make the avalanche a good thing, at least partly.
The whole problem with the bubble was that banks/mortgage brokers were so avaricious, so focused on making money, that they didn’t underwrite credits appropriately. Now it also turns out that in some cases they didn’t paper the deals appropriately either. Both are symptoms of greed outrunning prudence and proper procedure. Both appear to have resulted in screwing up the market.
Given that banks paper deals all the time, but the average homeowner does so very infrequently, my view is that the law should err on the side of protecting homeowners, as the less informed parties. In other words, the banks should know a h*ll of a lot better.
So to the extent that some homeowners end up benefitting from the banks inability to produce a note, I have no problem with that. Producing the note is the minimum we should require from a bank. If they can’t produce valid paperwork, too f-ing bad for them — they’ll be that much more careful in the future.
No, Right to Rent is simply tantamount to Right to Somebody Else’s House. In the case of a legitimate foreclosure, there’s another hard working American who wants to buy it and can actually pay. Millions of Americans are denied houses under fraud for housing.
Of course, this article is about allegedly fraudulent forclosures so apples and oranges.
Apologies for the snark:
…Or a flipper. Or an “investor…”
This seems like a pretty clear case of somebody trying to steal homes from their rightful owners, which in these cases would be the lenders who actually have the legal standing to foreclose. I can’t see why the “homeowners” are suing, unless it’s because the loans are so confused that the legal holders of the loans don’t even know who they are, but the end result should rightfully just be reversing the foreclosures and returning the decision over when and whether to kick the defaulted borrowers out to the real lenders.
If there is any borrower “redress” to be made because of invalid lender documentation or failure to follow legal requirements, my proposal would be a return of all down payments and fees (which would be nil for borrowers who put no skin in, of course) and striking the loans from the borrowers’ credit histories when they turn in their keys and walk away. For most other things you buy, if the seller doesn’t deliver you return your purchase for a refund, why not mortgages?
GeneK, That’s a pretty good idea. If it weren’t for the MERS angle (the possibility that shortcuts occurred before the foreclosure proceedings) I’ll bet that would get a lot of traction. Unfortunately they’re going to have to examine every damn document from the last 5 years before they start talking deals. Ugh.
Jim, that must be an old list, since WaMu is still on it.
Wow.It looks like a solid case. what a mess.
This stuff strikes me as made for TV, as in congressional hearings. Imagine the “Who’s on First?” routine. Get some good example cases where no one knows which end is up, get some document signers to testify who don’t have a clue, go from there.
Too bad they’re all too busy buying their seats back right now.