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Hey bank don’t change the locks or you may not sell the home and could get sued

By
Real Estate Agent with eXp Realty LLC 200311024

Please don't change my locks Mr. Bank

If you work short sales, I’m sure you have run into the phone call in the middle of the afternoon where a buyer’s agent is at the door and they are calling to ask you why the keys don’t work. That is when you find out the locks have been changed by the bank. (Is this legal?)

Well, one of my clients who happens to be a long haul trucker and really only uses his house for a storage place, told me to list his home. He had me put it in the MLS as vacant, but did have stuff in it so people wouldn’t panic when they entered what they thought was a vacant home to find what looked like a home that was lived in.

Fast forward two months when I get the after noon call about the locks being changed and a buyer’s agent that can’t get in. I called Bank of America and they claimed not to know what I was talking about despite the note in the window saying they changed the locks and to call the number I was calling if I had any questions about the property.

Well, here is the problem, everything is still in this guy’s house and now no one has access to the property including the inspector that is supposed to be there on Tuesday. My client was confused and was asking me all types ofquestions that I had never been asked about this practice, because every other time I had seen it done the seller had completely moved out and just didn’t really care about the bank doing this. But, this time was different,this guy had all his stuff in the property and he wanted it back!

His question was, “how could they do this, it isn’t their home until they foreclose, right?” To be honest, I couldn’t argue with him on that point. That would be no different than me changing the locks on your house, they way we saw it. But, I told him, to be honest I don’t know and that he should contact a real estate attorney and ask them.

What did he do on Monday? He called his lawyer and his lawyer said, they can’t do that and told my client to call his bank and demand the key within 3 business days or he would have to file suit against the bank. Guess what my client had within 3 business days. Yep, he has his keys in hand.

So, what makes these banks think they can do this? Did they not talk to their lawyers about this first? I know as a landlord if I try to lock someone for non-payment of rent before I head to court to get the rights to the property back, I have the chance of going to jail and owing the renter some serious money. Could the banks be in line for the same results where an owner who is locked out sues the bank?

Comments(20)

Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Hi Todd!
You are in good company...it happens around here as well.  Bank of America appears to be the worst in any dealings with the properties they have loans on.  I think they get on automatic pilot and just order things without finding out if they have the right to do so...very frustrating! I sure am glad that the government is protecting these poor banks!

Jan 09, 2010 12:04 PM
Frank Kliewer
Woodinville, WA

Hi Todd, why am I not real surprised by the bank's action? It seems that there is a real disconnect anymore between the lenders and the property owners. Gone are the days when everyone talked to each other. It is a real shame. Good advice from you on this though. Glad he got his keys, hope he didn't miss out on a sale.

Jan 09, 2010 12:28 PM
Brian Lee Burke
Kenna Real Estate - Lone Tree, CO
Broker & Advising Expert-Kenna Luxury Real Estate

Todd - BoA did it to our seller recently too, seller called and they overnighted the key to them and foreclosed on it the next day! sigh... ~Rita

Jan 09, 2010 12:30 PM
Barb Szabo, CRS
RE/MAX Above & Beyond - Cleveland, OH
E-pro Realtor, Cleveland Ohio Homes

When will this insanity stop? I have a feeling it will be quite some time. I'm glad your seller got his keys.

Jan 09, 2010 12:31 PM
Nathan Tutas
Tutas Towne Realty, Inc. - Davenport, FL
Your Central Florida Real Estate Expert

I wonder how many times this has happened all across the US. Maybe someone should start a class action lawsuit against some of these banks. Anything to keep them in check. Dealing with banks is getting old.

Jan 09, 2010 12:46 PM
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

In my experience, the banks tend to hire people for next to nothing and then give them tons of responsibility.  These people don't know the laws and muddle their way through, making every mistake in the book and learn by being called out on what they've done wrong.  The banking "profession" isn't what it used to be - that's for sure!

Jan 09, 2010 02:17 PM
Lisa Schmitt
Coldwell Banker Honig-Bell - Plainfield, IL

This doesn't surprise me.

I recently took a call from a man who was contracted by a company I never heard of to winterize a listing I had. My seller's mortgage was indeed in default, but it hadn't yet gone to a sheriff's sale. The nice man also offered to change the locks for usk, too! The only reason he called me was because he saw my sign in the yard. I told him not to do anything, thank-you-very-much.


Jan 09, 2010 02:39 PM
Fred Carver Real Estate Consulant
Retired BC Realtor - Victoria, BC
Accredited Real Estate Consultant

Hi Todd...this Bank is just being Stupid, they could and may still get into a lot of trouble changing locks on a home before a foreclosure goes through, if in fact it does...They Could be Sued for Frustrating a Contract if a bonified buyer cannot inspect the home...I wonder if they with act just as quick when you present an offer from a buyer.

Cheers

Jan 09, 2010 03:01 PM
Jill Watts
Realty Pro, Inc. - Vancouver, WA
A Luxury Experience at Every Price Point!

Todd, you always have such interesting stories to tell about your clients. B of A is supposed to be a mega bank, you'd think they'd want to have a spotless reputation.

Jan 09, 2010 03:08 PM
John Occhi
AZ Veteran Notary Services - Marana, AZ
Mobile Notary Public/Certified Loan Signing Agent

One time I had a bank take possession of a home right after it was vacated - not sure how they figured it out and the seller said let it og and moved on.  Interesting scenario.

John

Jan 09, 2010 03:24 PM
Cherise Selley
Selley Group Real Estate, LLC - Colorado Springs, CO
Colorado Springs Realtor

Todd...unfortunately, i think these are the first steps into real economic nationalization...healthcare will also help facilitate the socialism...

Jan 09, 2010 05:03 PM
Melinda (Mel) Peterson
Grants Pass, OR - Bend, OR
The Savvy Broker - ABR, CRS

Todd ~ I had the same thing happen on one of my BofA short sales.  Except, I got a call from the neighbor, who said she thought someone was breaking in the house, so she called the police!  We called BofA and they didn't have any record of it.  After several days, they finally figured it out.  I demanded a key and weeks went by and no key.  Funny thing is, BofA ordered a BPO on the property and the BPO Agent couldn't get in the house because there was no key.  When the BPO company called me, I told them to take it up with their client (BofA).  Ha!  A double edged-sword.  We eventually got a key 3 weeks later! 

Jan 09, 2010 07:23 PM
Irene Kennedy Realtor® in Northwestern NJ
Weichert - Lopatcong, NJ

Todd,

This is why I insist a bank provide me documentation of the foreclosure before I get locks changed or list a property. Sadly, it usually then takes them a couple weeks to provide proof. No way would I risk the situation you've mentioned.

Jan 09, 2010 10:56 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Todd,

The same thing happened at one of my short sales last year.  My clients filed a police report for breaking and entering.  Funny, but the short sale was approved two weeks later and it included a provision to not sue and release the lender from liability and prosecution.

Jan 09, 2010 11:17 PM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Wow!  What a story!  I can't believe the bank would do that...oh wait, its Bank of America!!!!

Jan 10, 2010 01:56 AM
Jim Hale
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website

Todd -

What a story!  B of A is a piece of work.  We have a listing on which we discovered the sellers are in arrears. After getting proper permission into their files, I called BofA' servicing arm and inquired of status, balances, etc.  The person said it had been sent to Recon for foreclosue action recently.  I asked them for a number and called Recon.  A nice man in Costa Rica told me his company did not yet have the file...the bank still had it.  He could see right there in his computer that they did.

In other words, the house hadn't been forwarded until my inquiry.  We'll be on the look-out for the lock-out.

Jan 10, 2010 05:00 AM
Steve Shatsky
Dallas, TX

Hi Todd... I have dealt with this so many times that I want to scream.  What's even worse is that I have had banks remove and discard my lockboxes in the process by simply removing the entire doorknob to which it was attached!  It is a horrible practice and does nothing but create problems and conflict.  The lenders need to be held accountable.

Jan 10, 2010 07:00 AM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Well, the home was broken into by someone and the locks were changed back to the original locks on this house. The funny part is no one is taken responsibility, all I know is that it wasn't the seller as he is in Colorado right now. The inspection is tomorrow, so we know it wasn't him, the listing agent was on vacation since Thursday, so it wasn't him and I know it wasn't me. I almost wonder if a BPO agent did it. (Because I did leave a nasty note on the door about BofA and the locks being changed)

Jan 11, 2010 01:54 AM
Martin E. Kalisker, Esq.
Natick, MA
Real Estate Law From A Practical Perspective

Wow - to change the locks on a short sale?  I've never seen this and hope never to!  It just doesn't make any sense to change the locks - the bank doesn't own the home yet - whether the borrower is in pre-foreclosure or is current on payments - it doesn't matter!

Glad that your client had a good attorney that got immediate results.  Otherwise, it sounds like something that I would have gone to Channel 5 news about.

Jan 11, 2010 01:56 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Sometihing like this happened in our area.It was in the news.The old lady had gone away for few days and when she came back the locks were changed though the bank had remodified the loan but someone did not gte the info on time.

Jan 11, 2010 10:06 PM