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Cole vs Baum

Cole vs Baum

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Published by DinSFLA

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Published by: DinSFLA on Aug 07, 2011
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08/14/2011

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)ORIGINAL
FILED
IN
CLERK'S
OFFIC~
us
DISTRICT COURTE.D
NY
UNITED STATES
DISTRICT
COURT
*
AUG
0 4
2011
*
EASTERN
DISTRICT
OF
NEW YORK
I~
yf;}~!l-~EORGIA
BROWN,
iniiiVid'uaHy
and
on
be'liiilf
of
all others similarly situated,Plaintiffs,Case No.:CLASS
ACTIONCOMPLAINT-against-JURYTRIAL
DEMANDEDSTEVEN
J.
BAUM, P.C.,
TOWNES.
J.
Defendant.
,.,-)~11
" ; .,.
~
" 'j,,-l
PRELIMINARY
STATEMENT
I. Plaintiffs Imogene Cole and Georgia Brown bring this action on behalf
of
themselves and a class
of
similarly situated New York residents challenging the unfair andunconscionable debt collection and deceptive practices by defendant Steven
J.
Baum,P.C.("Baum") in residential foreclosure actions by grossly neglecting or willfully failing to filethe specialized Request for Judicial Intervention required by the Uniform Rules for the NewYork State Trial Courts ("Uniform Rules")
§
202.12-a(b),
22
New York Code
of
Rules andRegulations
§
202.12-a(b), which, in
tum,
deprives Plaintiffs and class members
of
their right tothe statutorily mandated settlement conferences under New York Civil Practice Law and Rules("CPLR") Rule 3408 in foreclosure actions (the "Class").2. Under New York law, plaintiffs, like banks, other lenders, and mortgage loanservicers who commence actions to foreclose on the homes
of
certain homeowners ("foreclosingplaintiffs") are required to follow specific procedural guidelines to ensure that the homeownerhas ample opportunity to be apprised
of
alternatives to foreclosure, such as a loan modification.
Case 1:11-cv-03779-SLT-SMG Document 1 Filed 08/04/11 Page 1 of 36 PageID #: 1
 
More specifically, counsel for foreclosing plaintiffs are required
to
file not only proof
of
service
of
process
of
foreclosure complaints, but also a specialized Request for Judicial Intervention("RJI") that will prompt a designated settlement conference.
3.
The difference between merely filing proof
of
service and filing the RJI ismomentous to the borrower. By itself, filing proof
of
service
of
the summons and complaint inforeclosure actions starts the clock against borrowers for delinquent interest accruals andassessments
of
delinquency-and foreclosure-related fees, costs, and other charges. Not until anRJI is filed, however, do the full protections
of
a settlement conference come into play.
4.
At this mandated settlement conference, the borrower will not only have theopportunity to negotiate loan modifications or other loss mitigation options
(e.g.,
short sale anddeed-in-lieu-of-foreclosure) with court oversight, but will also obtain access to free housingcounseling, legal services, and other assistance
as
they seek to obtain a loan modification. TheNew York Legislature and the New York court system have deemed these settlementconferences
to
be a crucial step in stemming the tide
of
home foreclosure, and experience hasborne this out. Where settlement conferences have occurred, foreclosures have decreased
by
upto 90 percent.
5.
Surprisingly, counsel for foreclosing plaintiffs, like Defendant Baum, have notbeen filing the RJis that would trigger judicial oversight. Defendant Baum is one
of
handful
of
law firms in New York State that handles bulk foreclosures for foreclosing plaintiffs. Indeed,Defendant Baum represents foreclosing plaintiffs in approximately
40
percent
of
foreclosures inNew York State. Yet, evidence demonstrates that Defendant Baum has been wildly remiss infiling the now-required RJis. Defendant Baum has filed specialized RJis only in approximately
seven
percent
of
cases in which it is required by law
to
file such RJis.
2
Case 1:11-cv-03779-SLT-SMG Document 1 Filed 08/04/11 Page 2 of 36 PageID #: 2
 
6.
In order to implement the Legislature's directives contained in CPLR 3408, theNew York State Unified Court System added a new Section 202.12-a
to
the Uniform Rules forthe New York State Trial Courts ("Uniform Rules"). Section 202.12-a governs residentialmortgage foreclosure actions and establishes mandatory court procedures for both theforeclosing plaintiff and the homeowner in the settlement conference part.
7.
Under Section 202.12-a(b)(l), foreclosing plaintiffs in all residential foreclosureactions must file a "specialized" RJI simultaneously with the filing
of
proof
of
service
of
thesummons and complaint with the court clerk. This "specialized" RJI identifies the case as aresidential mortgage foreclosure and propels the foreclosure action into the settlementconference part.
8.
Additionally, once a specialized RJI is filed, the New York court provides thehomeowner's name and contact information detailed in the RJI to local housing counselingagencies, which is an important opportunity for homeowners to receive meaningful andappropriate counseling prior to the settlement conference. These housing counseling agenciestypically prepare the homeowner for the settlement conference, referring the homeowner to freelegal services agencies that offer foreclosure defense representation and assist with thecomplicated mortgage modification application process.
9.
Defendant Baum's failure to observe CPLR 3408 and Uniform
Rule§
202.12-a(b)operates
to
rob Plaintiffs and Class members
of
the opportunity to resolve their mortgage loandelinquencies through CPLR 3408 settlement conferences and constitutes unfair andunconscionable collection practices in violation
of
the Fair Debt Collection Practices Act,
15
U.S.C. § 1692,
et
seq.
("FDCPA"). Defendant Baum's conduct also violates New York GeneralBusiness Law ("NYGBL") § 349.
3
Case 1:11-cv-03779-SLT-SMG Document 1 Filed 08/04/11 Page 3 of 36 PageID #: 3

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