One of the state's biggest foreclosure law firms agreed Thursday to pay $2 million to settle a federal investigation over "sloppy" foreclosure practices on Long Island and elsewhere.

The Steven J. Baum firm, based in upstate Amherst, did not admit wrongdoing but acknowledged it "occasionally made inadvertent errors" in documents, said the U.S. attorney's office in Manhattan. Investigators had looked at whether the firm, working on behalf of lenders or investors in mortgages, "knowingly or recklessly" filed misleading paperwork on details of the delinquency and on proof of mortgage ownership.

"Homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted, and today's agreement will help minimize that risk," said Manhattan U.S. Attorney Preet Bharara.

In a statement, Baum said his firm would "continue to adhere to the highest ethical standards," adding, "We have agreed to changes in our foreclosure practice that go over and above what current law requires."

The deal comes a year after the "robo-signing" scandal, in which employees at several major lenders admitted to signing thousands of foreclosure-related documents monthly without verifying their accuracy.

Among other things, the settlement prohibits Baum attorneys from filing documents asserting their client owns a mortgage unless they have reviewed the original mortgage note or have seen a copy accompanied by an affidavit signed by the client. The firm must also designate attorneys with at least five years' relevant experience to supervise foreclosure and bankruptcy cases.

Woodbury-based attorney Heath Berger, who has challenged some of Baum's filings on behalf of homeowners, called the agreement a "victory for the little guy.

"It is about time that the homeowners receive some protection," he said.

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