The Young Law Group: In The News

Rivals See Chance for Growth With Baum Firm's Collapse
Published in New York Law Journal: January 23 2011 - By Andrew Keshner

New York's largest and most controversial foreclosure law firm may be going out of business, but two former high-ranking attorneys at Steven J. Baum P.C. are picking up cases that were handled by their old employer in a new firm that includes other Baum alumni.

Gross, Polowy & Orlans is one of a number of firms throughout the state receiving cases from lenders that were handled by the Baum firm, which announced in November that it was winding up its affairs.

Ivan E. Young of the Young Law Group in Bohemia, who defends homeowners in about 200 cases, said that 60 percent of the lenders had been represented by Mr. Baum. He said that most of those have now gone to large firms, such as Hogan Lovells. Mr. Young said he frequently files motions and counterclaims.

After Mr. Baum announced his firm's closure, observers expressed concern that the time it would take for the lenders to transfer cases would further slow foreclosure litigation, already moving at a glacial pace in New York.

Benjamin M. Lawsky, the head of New York's Department of Financial Services, wrote to mortgage services companies on Dec. 19 urging them to "make every effort to move the process of having substituted counsel appointed."

In Westchester County, the Baum firm represented lenders in 30 percent of the county's foreclosure caseload.

Nancy Barry, chief clerk of the Westchester County Supreme and County courts, acknowledged the transfer of those cases has meant an increase in data entry owing to attorney changes and an increase in inquiries from homeowners who want to know how the firm's upcoming closure affects them.

But there have been fewer adjournment requests than expected, she said.

"It's been a very consistent and steady changeover.," she said.

Ms. Barry said it seemed like there has been a "fair distribution" of Baum firm cases to other attorneys. "It seems like they're going to experienced, familiar foreclosure firms," she said. User must subscribe to read at NewYorkLawJournal.com

BOFA-Aurora Appraisal Fraud $1.8Million Lawsuit Filed in New York for One Homeowner
Published on Living Lies Blog: January 11 2012 - By Neil Garfeild

Use this form under the heading “Best Practices” — Excellent in every respect. Hats off to Ivan Young of the Young Law Group in Bohemia, New York. I say the Defendants have a collective exposure of several million dollars. If I can find one lawyer that writes a complaint for identity theft on a client like this, we will have completed our forms library. They never could have done this without falsely inflated appraisals, falsely inflated ratings and without stealing the identity of credit worthy borrowers.

Talk about a lawyer who gets it!! These lawyers all get it and they are after the the biggest players, weaving together the fraud and the participants in the fraud in an artful way that will in my opinion easily get past a motion to dismiss. My only regret is that these lawyers are so good at pleading and most likely so good at discovery that the case will settle before we get much more out of this case. I am fairly certain that these lawyers were probably threatened with all sorts of consequences if they file the suit. This lawsuit says “Bring it on!”

Here are the things I like about this lawsuit:

1. It puts appraisal fraud front and center in the complaint. Nothing timid about this.

2. The Defendants include everyone in the securitization chain including, counter-intuitively but factually correct, the Aurora Lehman Nexus with BOA and Countrywide.

3. The point is that but for the appraisal fraud none of these players would have played the game at all, and this is clear from the complaint.

4. BOA “expected or should reasonably have expected its acts and business activities to have consequences within the State of New York, County of Nassau.”

5. Paragraph 7 correctly states the interrelationship between BOA and the CW companies.

6. Nailing the appraiser for failing to register in the State to do business. Could lead to blocking the appraiser from filing any defense.

7. Names the individual appraisers as Defendants — the only way to have someone on the hook who can flip on the other defendants and admit the wrongdoing.

8. The lawyer figured out the relationships between the different appraisers and appraisal companies before he filed the suit. So when they come in trying to play the shell game they will end up with dirt all over themselves.

9. The lawyer figured out the interrelationships between the appraiser, the title agents, the title agent etc. before he filed the suit.

10. The lawyer nails the facts on appraisal fraud. Then traces step by step how the value was inflated.

11. The allegations weave in violations of TILA and RESPA seamlessly so that the facts speak for themselves without interpretation required.

12. The clear language of the complaint details the manner in which the Plaintiff was duped and the manner in which the plaintiff was financially damaged in money and credit standing.

13. “Countrywide fully knew that the loan was based upon a completely bogus appraised value” and “immediately sold, transferred or assigned Plaintiff’s’ first mortgage to Aurora Bank, F.S>B. a/k/a Aurora MSF Lehman.”

14. RICO, instead of looking like it is out of the blue or a stretch, is an obvious next step, and the lawyer takes it with ease.

Read full blog post on Neil Garfields's living lies website

Judge Recuses From Foreclosure Involving His Lender
Published in New York Law Journal: December 21 2011 - By Andrew Keshner

A judge whose widely publicized decision to cancel the mortgage of a Long Island homeowner was overturned has now recused himself from the case, with public records showing he holds a mortgage through the same lender.

Acting Supreme Court Justice Jeffrey Arlen Spinner in Suffolk County recused himself from IndyMac Bank v. Yano-Horoski, 17926-2005, the day after the lender's attorney asked him to step aside. The lawyer referred to "a commercial relationship" between the judge and the lender, OneWest Bank, which had acquired the assets of IndyMac Bank from the FDIC, the receiver. IndyMac was the original plaintiff in the action.

Justice Spinner wrote that he was taking the action "[u]pon the court's own initiative, for reasons which are dehors the record" but provided no other details.

A review yesterday of the Suffolk County clerk's online database shows IndyMac Bank is listed as the mortgagee for a residence listing the justice as one of the mortgagors. The mortgage was filed on Jan. 31, 2004.

Justice Spinner, through a court spokesman, declined to comment because the case is pending.

Justice Spinner canceled Diana Yano-Horoski's $292,500 mortgage and judgment of foreclosure on her East Patchogue home in November 2009, faulting lender officials for their "harsh, repugnant, shocking and repulsive" treatment of Ms. Yano-Horoski during settlement conferences over which he presided (NYLJ, Nov. 23, 2009).

The canceled mortgage was reinstated when the Appellate Division, Second Department, held the "severe sanction was not authorized by any statute or rule nor was the plaintiff given fair warning that such a sanction was even under consideration" (Nov. 22, 2010).

With the mortgage reinstated, the homeowner's new pro bono attorney, Ivan E. Young of the Young Law Group in Bohemia, sought a vacatur of a default judgment obtained by the bank against his client. Mr. Young claimed improper service, extrinsic fraud and newly discovered evidence.

OneWest countered with a dismissal motion and the case was scheduled for oral arguments on Dec. 7 before Justice Spinner.

In a faxed Dec. 6 letter, an attorney representing IndyMac Bank, Allan J. Arffa, a partner with Paul, Weiss, Rifkind, Wharton & Garrison, wrote, "Our client has informed us of certain developments, relating to a commercial relationship that exists between Your Honor and OneWest, that reasonably call into question Your Honor's impartiality in this matter, or at the very least clearly create an appearance of partiality, and that we respectfully require Your Honor's recusal in this matter. Although we are reluctant to raise this issue, after careful research and consultation, we have concluded that, as a matter of professional responsibility, we have no choice but to pursue the matter, initially by calling the issue to the attention of the parties and the Court. "

Mr. Arffa was one of three Paul Weiss attorneys handling the Second Department appeal in 2009, along with McGlinchey Stafford in Albany.

The Dec. 6 letter does not specify the judge's "commercial relationship" with the bank. Mr. Arffa referred questions to his client OneWest, which declined to comment.

In any case, it is unclear whether Justice Spinner was required to recuse himself if his mortgage was the relationship to which Mr. Arffa was referring.

Under Section 100.3(E)(1) of the Rules of the Chief Administrative Judge, judges must disqualify themselves "in a proceeding in which the judge's impartiality might reasonably be questioned."

Under §100.3(E)(1)(c), one of those instances includes where "the judge knows that he or she, individually or as a fiduciary, or the judge's spouse or minor child residing in the judge's household has an economic interest in the subject matter in controversy or in a party to the proceeding or has any other interest that could be substantially affected by the proceeding."

Here, there is no indication that the judge has an economic interest in the Yano-Horoski house or that his own mortgage could have been affected by his actions in the case.

With foreclosure cases flooding the courts in recent years, several decisions by Justice Spinner—including the Yano-Horoski ruling—have gained media attention. Lenders have taken notice too, apparently deciding against sending junior associates to handle cases before the judge (NYLJ, July 15, 2010).

Nevertheless, Mr. Young said Justice Spinner was "quite capable" of fairly handling each case.

"There is no doubt in my mind that he could be fair and impartial. If you look at his record, he decided against banks and with banks," Mr. Young said.

The case has been reassigned to Suffolk County Supreme Court Justice Jerry Garguilo and next court date is scheduled for Jan. 12.

Meanwhile, Mr. Young has raised new claims in an effort to allow the Yano-Horoskis to stay in their home.

Firm Accused of Deception

In October court papers, Mr. Young contended the January 2009 default judgment of foreclosure against his clients had to be vacated due to the lack of personal service and the "extrinsic fraud" committed by the lender and Steven J. Baum P.C., its counsel before Paul Weiss entered the case.

In one "instance of deception," Ms. Yano-Horoski's husband, Gregory, allegedly contacted Mr. Baum after the complaint was served.

Mr. Baum, according to the defendant's filings, told the husband it was not necessary to file an answer because the foreclosure would be dismissed if a modification could be achieved or the outstanding balance was paid. Mr. Baum also allegedly told him the homeowners had time to make the mortgage current.

In a second incident, Ms. Yano-Horoski claims she spoke with an unnamed woman lawyer at the Baum firm three days after her bankruptcy petition had been dismissed.

The attorney allegedly told Ms. Yano-Horoski it was too late to file an answer. The homeowner's court papers, however, argue the bankruptcy triggered an automatic stay of the foreclosure and the Baum firm misrepresented that fact in filings to obtain the foreclosure.

Mr. Young also argued the foreclosure action was fatally flawed owing to standing deficiencies; the plaintiff lender did not own the mortgage and note; and "true and obvious discrepancies" existed between the mortgage and note filed with the clerks' office, the court and given to the defense, the attorney said.

Mr. Young's motion seeks the caption be amended to include Deutsche Bank, in its capacity as a trustee of a particular home equity mortgage loan asset-backed trust.

In court papers, Mr. Arffa rejected Ms. Yano-Horoski's motion as "palpably deficient."

He rejected claims of improper service and said extrinsic fraud allegations were insufficient and unsupportable. In affirmations, Mr. Baum and the two attorneys at the firm who handled the case said they never spoke with either Mr. Horoski or Ms. Yano-Horoski.

Once the largest foreclosure law firm in New York, the Baum firm has been heavily criticized for its practices and recently announced that it was shutting down. Mr. Baum declined to comment on the litigation for this article.

Mr. Arffa called the lack of standing claims "unfounded speculation as to the 'true' owner of the note and mortgage relating to the loan that fails to furnish competent evidence of any meritorious defense."

Noting in court papers that during the course of the action OneWest has paid approximately $160,000 in principal and interest, plus $64,000 in insurance and taxes, Mr. Arffa said, "Having lived in her home for free for the past five years and more, it is more than time for defendants to cease trying to postpone the inevitable. If ever a borrower in a foreclosure proceeding had her day in court, Ms. Yano-Horoski is that borrower." User must subscribe to read at Law.com
 

Indymac vs. Horoski: Judge to reopen Patchogue foreclosure judgment

Published in Newsday: November 1, 2011 - By Ellen Yan

A state judge yesterday agreed to reopen the foreclosure judgment against an East Patchogue couple - a year after his order to wipe out their mortgage was overturned - in the latest twist in a six-year battle.

Judge Jeffrey Arlen Spinner in Riverhead signed an order to temporarily bar IndyMac Mortgage Services from auctioning off the home of Gregory Horoski and his wife, Diana Yano-Horoski.

A few weeks ago the couple and their attorney Ivan Young of Bohemia, accused IndyMac and its former law firm, Steve J. Baum in Amherst, of deception on several key details. They're also suing for $10 million in fraud damages. IndyMac hasn't responded in court yet.

"The anxiety that had been caused over the years is much more than the value of the mortgage," Greg Horoski said in an interview.

The central allegation is that IndyMac has no legal right to foreclosure because it does not own the mortgage note. The couple alleges in court documents that IndyMac representatives "did actually slip up" in court by admitting the investor owner was Deutsche Bank.

Both IndyMac's parent company One West Bank, and a spokesman for Baum declined to comment. A Deutsche Bank spokesman said the new filing will be reviewed.

IndyMac started foreclosure against the couple in 2005 and won the case in 2009. The couple fought the judgment, and in recent years the case has been closely watched by attorneys and lenders. Two years ago Spinner voided the couple's $300,000 mortgage debt. Last year an appellate division of the state Supreme Court reinstated the foreclosure judgment, saying there was no legal basis to erase the debt. Read the article at newsday.com

Steven J. Baum PC Foreclosure Law Firm to Close

Published in New York Law Journal: November 22nd 2011 - By Andrew Keshner

New York's largest foreclosure firm, Steven J. Baum P.C., yesterday announced "mass layoffs," signaling that the firm is closing its doors. The move followed recent decisions by Fannie Mae and Freddie Mac to stop referring new cases to the embattled firm.

Freddie Mac and Fannie Mae recently dropped the Baum firm from their attorney networks but spokesmen for the government-sponsored enterprises declined to discuss the reasons behind those decisions (NYLJ, Nov. 16).

Last month, however, the firm came under fire after photos from a 2010 Halloween party where employees donned costumes spoofing the homeless surfaced in a New York Times column by Joseph Nocera.

Ivan E. Young of the Young Law Group in Bohemia exclusively handles foreclosure defense, with about one-third of his approximately 200 cases handled by the Baum firm for the plaintiff lender.

Mr. Young expected another firm would eventually become the leader in lender representation.

"It's only a matter of time before another firm steps up and becomes a foreclosure mill," he said, adding "the most immediate impact is the logjam on all these cases Baum has been representing."

Mr. Young said when defending against actions represented by the Baum firm he would raise defenses including perceived conflicts of interest with staff attorneys signing off on MERS assignments and poor cooperation from Baum attorneys.

"I think that when you play loose for an extended period of time, it tends to catch up with you," he said.

The Baum firm has been called a "foreclosure mill" by critics, a term Mr. Baum told the Law Journal earlier this year he found "offensive."

Mr. Baum observed in a February 2011 profile that foreclosure attorneys are "an easy target for criticism."

"[W]e don't see firms being called 'securitization mills' for the vast number of mortgage securitization work they did," he said. "If what we did was easy, there would be hundreds of firms doing it, yet there are about a dozen who actually practice in the area" (NYLJ, Feb. 17).

The New York State Attorney General's Office is investigating the Baum firm, according to media reports. Read the full article at NewYorkLawJournal.com

Ivan Young was featured on CBS Channel 2 Evening News Nov 3rd, 2011 at 5pm

Read the CBS article here at cbslocal.com

Ivan Young was featured on WPIX Channel 11 Evening News Nov 3rd, 2011 at 10pm

View the Evening News video here at wpix.com

New York foreclosure backlog: 'A totally different world'

Published in HousingWire: May 16th, 2011 - By Jon Prior

Ivan Young has been defending borrowers in the state for roughly five years as partner of the Young Law Group. He welcomed the affirmation rule as it imposes a new sense of due diligence on attorneys and holds those accountable who do not check their information.

"The effect is that a lot of the bank attorneys are scared to put in that affirmation," Young said. "It's clear they have some robo-signers involved, some assignments and affidavits, and they are reluctant to submit that affirmation. That is one of the side effects. It is causing a delay on the front-end."

Young also complained of "a constant pattern" of delays from the banks themselves. Some New York court judges hold settlement conferences where the borrower can seek a modification or some type of resolution with the bank, but he claims the banks are not reviewing the documentation submitted in a timely manner. Read the full article at housingwire.com

The Young Law Group providing research to the NYS Office of the Attorney General

Published in El Diario: August 28th, 2011 - By Eliseo Medina

[English translated article] Like Millions of Americans, Blanca Hendley Ramirez’s American Dream turned into a nightmare. Blanca is a single mother living with her two children in Nassau County, New York. Ramirez originated a subprime loan in 2006. Upon an alleged default in payments, the financial institution fraudulently assigned Ramirez's mortgage to another servicer, and commenced a foreclosure action in 2010. Prior to that, Ramirez was doing everything she could to avoid losing her home and was in active negotiations with the mortgage servicing company, including asking for a loan modification. After promising to modify, the lending institution has instead kept Ramirez in a never ending chain of lies, confusion and paper work. Blanca is still fighting to save her home in the state Supreme Court.
Communities of color are suffering the most in this recession. Despite their contributions to the middle class and the economic well-being of our country, African American and Latino workers are shouldering the burden of the recession while big corporations avoid paying their fair share. Dramatic declines in home value coupled with record-high unemployment rates threaten to erode hope for a brighter financial future for many African American and Latino families.

According to a recent study, the median wealth of white households is 20 times that of African American Households and 18 times that of Latino households – the largest wealth gap in 25 years. The housing bubble that led to this devastating recession is due in large part to unscrupulous lenders who swindled unsuspecting customers, mostly African American and Latino borrowers, into purchasing faulty products. Families across the country continue to lose their homes, a primary source of financial stability, as they are forced to choose between paying their bills, putting food on the table, and covering medical expenses. What consequences will these shady lenders face for trapping families with deceptive loans? Virtually none, if some lawmakers have their way.

A study by the Center for Responsible Lending shows that in 2007 African Americans and Latinos were far more likely than whites to be sold higher-priced loans in the subprime market. Though abusive bank practices are to blame for the housing bust that created this recession, banks seem to be getting off scot-free. It is time to take a stand for the working men and women who helped build this country. We cannot afford to let Wall Street and greedy corporations get away with the fraudulent practices that led to this deepening recession while families across the country continue to pay the price. Enough is enough.

State prosecutors, led by New York Attorney General Eric Schneiderman, have become a voice for the voiceless, demanding an investigation of several big banks. The investigation could lead to measures that would finally hold the banks accountable, possibly resulting in criminal charges for some executives. This fight exemplifies the leadership needed nationwide to finally hold the banks accountable for their abusive practices. It is not only our right, but our obligation to stand up to the Wall Street giants and urge lawmakers to make them share in the burden.