Foreclosure abuses have been in the news so often over the past few years that Americans have almost become jaded at the lengths banks and other organizations will go to when potential foreclosure properties are concerned.
This latest deceptive practice, unveiled earlier this month, is something a little more shocking.
According to a lawsuit filed in Illinois by the state’s attorney general, Lisa Madigan, some property management companies are being contracted by banks to find out if properties they are managing are vacant or abandoned.
While there is nothing inherently wrong with that – banks need to know if the properties they are underwriting actually have homeowners still in them – some companies are taking it too far. The industry’s leader, a company called Safeguard, is accused of doing pretty underhanded things to homeowners who are very much in their homes, such as:
“breaking into homes despite evidence of occupancy, damaging and removing personal property, changing locks, cutting off utilities, and bullying occupants into leaving their homes when they have the legal right to stay”.
Other states are reporting other, similar practices that are not only unethical and abusive, but are illegal to boot.
Banks are in charge of overseeing any contractors they hire to deal with homeowners, including property management companies, but in this instance, they allegedly haven’t done a very good job. The fault lies with the way the system is set up. These property management companies make more of a profit off vacant homes because they require less work, and banks make money off selling vacant homes.
Furthermore, some of these practices were allegedly conducted while the homeowners were in the middle of loan modification negotiations with the bank, which is also against the law and in violation of loan modification protections from the federal government.
Finding a property management company that is responsible and ethical – not just for property owners, but for tenants – is so crucial in today’s real estate market. There are a lot of opportunities for success, but also a lot of opportunities for situations like the above to happen.
Looking for a property management company in Birmingham that does it the right way? Contact gkhouses.com and call 205.940.6363.