Photos leaked to the New York Times last week reveal shocking behavior on the part of a New York law firm responsible for about 40 percent of the state’s 46,572 mortgage foreclosures in 2010. Apparently, members of the Steven J. Baum law firm dressed as homeless people and squatters, and decorated the office to resemble a row of foreclosed properties.

Office decorations also reportedly included shopping carts, tarps, and other temporary residence structures associated with homelessness. The photos, it seems, were leaked by a former employee of the firm and come on the heels of foreclosure-related troubles for the law group.

Like many other bodies enacting mortgage foreclosures in recent years, the Steven J. Baum law firm faced allegations of improper behavior on its end of dealings. Specifically, the Department of Justice charged the firm with filing “misleading pleadings, affidavits, and mortgage assignments” in both state and federal courts.

To settle the charges, the law firm forked over $2 million, admitted wrongdoing, and agreed to change its practices.

But this most recently exposed blunder has reportedly led to further investigation, this time from New York’s Attorney General, Eric Schneiderman.

Insensitivity to Foreclosures?

Foreclosure firms are not popular during the best of times, but given the present housing situation in the U.S., they’re viewed as particularly villainous. An estimated three million people have already faced foreclosure since the housing boom ended about five years ago; some analysts predict that number will climb to six million by 2013.

It’s no secret that the widespread troubles in the housing market (of which foreclosures are currently the primary symptom) are to blame for much of the economic weakness the U.S. has experienced since 2008. Because of current economic conditions, the Halloween costumes and decorations donned by Baum employees read as particularly harsh.

Help for Foreclosures?

Foreclosures are often difficult to remedy, but at present those with mortgage troubles may have a number of options to help them hold on to their homes:

• HARP: The Obama Administration’s recently beefed-up Home Affordable Refinance Program (HARP) offers homeowners who are current on mortgage payments a chance to refinance with their banks before they default and become at risk for foreclosure.
• Chapter 13 bankruptcy: While the bankruptcy court cannot rewrite a mortgage loan during proceedings, people who file for Chapter 13 bankruptcy may have a chance to delay foreclosure proceedings long enough to find alternate living quarters. They may also be able to shed enough auxiliary debt to afford mortgage payments.
• Chapter 7 bankruptcy: Those facing foreclosure may be able to eliminate some of the burdensome tax consequences through Chapter 7 bankruptcy protection. At a minimum, Chapter 7 filers often gain enough breathing room from creditors to find another place to live.