In early 2012, the nation’s five big banks settled with state and federal regulators over widespread foreclosure abuses, including the seizure of homes without due process. Many of the abuses keep coming to light, but one little-known and rarely-discussed violation is becoming more widespread as banks foreclose on more homes.
After a homeowner is delinquent in their mortgage, the lender is allowed to hire a property management company to determine whether the homeowner had abandoned his or her home. If so, the management company is allowed to secure the vacant property, within reason. It does not always happen that way, and the nation’s largest property management company, Safe Guard, has been accused of breaking Illinois law, with allegations that it broke into homes despite evidence of occupancy, even damaging and removing personal property in the process. There are also charges that Safe Guard changed locks, cut off utilities and bullied occupants into leaving their homes when they actually had a legal right to stay there.
In mid-September, 2013, the Illinois attorney general filed a lawsuit against Safe Guard to hold it accountable for these violations. Under the 2012 Foreclosure Settlement, lenders became responsible for supervising and auditing the contractors, including ones like Safe Guard. There is certainly profit motive for the bank to take control of these vacant homes, since the sooner the house can be sold and the more the home is worth, the better. The banks are not able to make any money on occupied homes that haven’t yet forged their way through the foreclosure litigation process.
The bottom line is that eviction is only permissible after the legal process has concluded. In New Jersey and Pennsylvania, this means after a Final Judgment of Foreclosure has been entered and the property has been sold at a lawful Sheriff’s Sale.
For its part, Safe Guard claims that its work meets the highest standards in the industry. As these abuses keep coming to light, it remains to be seen how it will all affect the nearly 3 million homeowners who are in or near foreclosure.
Contact Shaffer & Gaier
To set up a free initial consultation, contact our office online or call our foreclosure hotline at 855-289-1660. Or call our office location in Philadelphia at 215-751-0100, or in New Jersey at 856-429-0970.
