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?
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