Judge Blasts Baum, Chase Home Finance, Pillar Processing “Order To Show Cause: In Re: Schuessler

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On November 28, 2007, several months after this Court scheduled an evidentiary hearing and directed Chase Home Finance to submit the Policy Affidavit, a letter was filed on the Court docket in this case addressed to the Clerk of the Court from a legal assistant acting on behalf of “Pillar Processing, LLC,” an entity unknown to the Court that appeared to have no connection with this case or these Debtors. The letter stated:

Dear Sir or Madam:

Respecting captioned bankruptcy matter, please be advised that the 362 motion scheduled for December 7, 2007, at 10:30am [sic] has been

Very Truly Yours,
By: Robin L. Brown
Legal Assistant

ECF Docket No. 23. Though no relationship was identified or explained in the body or letterhead, Pillar Processing and Chase Home Finance’s bankruptcy counsel, Steven J.Baum, P.C., share the same address and telephone number, and ECF reflects that the letter was filed using a password issued to “Dennis Jose [a Steven J. Baum, P.C. attorney] on behalf of CHASE HOME FINANCE, LLC.” Chase Home Finance’s bankruptcy counsel, Steven J. Baum, P.C., has made no effort to address or explain this act, or the propriety of this action on the record.

Finally, the Attorney Affirmation made no effort to explain the relationship between the Steven J. Baum, P.C. law firm and Pillar Processing, LLC, the non-legal entity that attempted to withdraw the Lift-Stay Motion.

The Court will issue a separate order denying the Lift-Stay motion and directing that neither Chase Home Finance, the current holder or owner of the note and mortgage, nor any of their successors-in-interest shall in any way seek or charge any attorneys’ fees or other charges against Debtors, their property, or the mortgage, whether now or at the end of the mortgage, if such fees or charges are in any manner connected with the Lift-Stay Motion, the Order to Show Cause, or the Evidentiary Hearing.

This decision is published as a warning, not just to Chase Home Finance and other mortgage servicers, but to all individuals and entities involved in the process, along the line – analysts, supervisors and other personnel employed by mortgage servicers; third-party vendors; regional law firms; and local counsel – that the conduct identified here, in this Court’s view, constitutes an abuse of process. Although the Court’s focus in this case was on the mortgage servicer’s conduct and did not order all of the participants to appear and respond to this Order to Show Cause, they will be included in future orders if such abusive conduct continues, and the Court will assume familiarity with this decision.

The Lift-Stay motion, which originated with a notation on an analyst’s computer screen, has generated a 60-page decision and stress on the Debtors for the nine-month period that the Lift-Stay Motion was pending. The Court is not compensated according to time spent on a particular case, but this Order to Show Cause has drawn time and resources away from other, meritorious cases. Judicial resources do not permit such a thorough examination of every case. This decision sanctions Chase Home Finance only for the actual costs incurred by the Debtors. In the Court’s view, the sanction is an extremely mild one, because the Supreme Court instructs that a bankruptcy court should exercise its Section 105 powers with restraint and discretion. The Court does not regard the exercise of restraint in this case to be a limitation on the sanctions that might be imposed in the future against Chase Home Finance or another mortgage servicer if this abuse occurs again. If Chase Home Finance, other mortgage servicers and any employees, third-party vendors, or any attorneys involved in the process at any level exhibit the same type of abusive conduct in the future, this Court believes that Section 105(a) authorizes sanctions of increasing severity.

Dated: Poughkeepsie, New York
April 10, 2008

/s/ Cecelia Morris .

See the full Schuessler Case at StopForeclosureFraud.com.

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