The upstate Amherst foreclosure law firm of Steven J. Baum can still be sued or challenged by homeowners despite the settlement reached Thursday with the U.S. attorney's office in Manhattan, according to the deal.
The firm's agreement to pay $2 million to the federal government releases it from potential claims under the Financial Institutions Reform, Recovery and Enforcement Act of 1989. That law authorizes the federal government to seek civil penalties for violations in some financial fraud cases.
The office of U.S. Attorney in Manhattan Preet Bharara said homeowners can still pursue any rights they may have in foreclosure cases prepared by the law firm. Baum signed the agreement to end an investigation into whether his firm had "knowingly or recklessly" filed misleading documents to foreclose on homeowners.
As part of the deal with federal authorities, Baum did not admit to any wrongdoing in foreclosure documentation practices. In a statement, he said his firm would “continue to adhere to the highest ethical standards.”
The federal probe came after the robo-signing scandal broke in the fall of last year.
Employees for three major lenders admitted they signed thousands of foreclosure-related documents without checking the accuracy.