We are talking about a case involving a mortgage field services company and the Illinois Attorney General. As we explained in our last post, mortgage servicers and lenders hire the field services provider to take care of a vacant pre-foreclosure or bank-owned property until it sells. Banks are not in the business of being landlords, but a property left to decay will not only lose value itself but will also lower property values for homes in the neighborhood. Field services companies are essentially in the business of preventing blight by, as one company put it, keeping properties secure, safe and well-maintained inside and out
The point is, of course, that the property is empty. In some cases, that may happen during the foreclosure process, or even leading up to the bank’s decision to foreclose. In other cases, however, the house may not be vacant until the deed is handed over to the new purchaser.
A homeowner may be months or, in theory, years behind on his mortgage payments, but he still owns the house. A lender may start foreclosure proceedings, but, until the home is sold, the owner has every right to live there. He has the deed until that sale closes.
In the Illinois case, the field services provider and its subcontractors either did not know or chose to ignore this. More than 200 homeowners and renters complained that the company or its agents had informed them that they could not stay in the houses during foreclosure. The field services company changed the locks, shut off utilities, cleared out their personal belongings.
Citing violations of consumer fraud laws, the state filed the complaint in 2013. It took some time, but the Attorney General recently announced that the field services company had agreed to a $1 million settlement. The money will be distributed to the complainants in equal shares. Tracking down those people, though, could take some time.
We will finish this up in our next post.
Source: Chicago Tribune, “Safeguard Properties’ $1 million settlement will take time to disperse,” Mary Ellen Podmolik, June 9, 2015