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The Lender Broke Into My House And Changed The Locks!

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

May 30, 2012 04:43 AM

If you handle Short Sales for a living then I am sure you have had this happen a time or two. As frustrating as it is the lender has the right to protect their collateral. Don’t believe it? Read the mortgage that was signed at closing.

It probably has a clause in it like this:

Protection of Lender’s Interest in the Property and Rights Under This Security Instrument. Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property . . . Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off(emphasis added).

So......you need to make sure your Sellers understand this at time of listing. If the owner doesn’t maintain their property the lender will.

Look at it this way, If the grass is not being maintained and the municipality places a fine and lien on the property who will have to pay this if the property goes to foreclosure or the seller does a short sale? The lender.

What happens if a neighborhood kid is harmed while playing in the pool? The homeowner AND the lender will be sued.

Who will pay for the damage from rain water coming in through the broken window? The lender will as it will reduces the value of the property.

If you are listing Short Sales it would make sense to have as a part of your listing agreement that the seller will maintain the property. Don’t you think?

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Cal Yoder

Keller Williams Elite - Lititz, PA

Homes For Sale in Lancaster PA - 717.413.0744

If the home owner's able to see beyond despondency, your advice is wise. It certainly would make sense to have the seller agree to keep it maintained.

Cal

May 30, 2012 05:08 AM

Melinda (Mel) Peterson

Grants Pass, OR - Bend, OR

The Savvy Broker - ABR, CRS

So true... Bryant! Have had it happen on a number of occasions. It's tough to engage a Seller to take care of the property when they have financially and emotionally disengaged themselves from it. What's a Realtor to do?! I like your suggestion to include a statement in the listing agreement ;)

May 30, 2012 05:47 AM

Melissa Grant

A Serendipity World - Greenbackville, VA

The Law of Attraction In Life & Business

Okay, so what happens when your grandmother goes to NY for medical care, is PAYING someone to maintain the yard, has utilities turned on, Hurricane Shutters are closed to protect from storms, mortgage, taxes and insurance are ALL paid. In the meantime, you have been working with the bank to do a loan mod and they issued you a forbearance. THEN out of no where, with NO paperwork filed or served, they come, break ALL the locks on your shutters to open them WITH your personal contents inside, change the locks, add a combo lock box so now you can't get in and break the lock on your sliding glass door that will allow anyone to gain access to your personal contents ? No foreclosure action, no summons, no nothing. This not only seems like vandalism but trespassing. THEY DO NOT OWN THE HOUSE and no court order says otherwise. My aunt lives down the street and is taking care of the house as well until my grandmother came back. This house was not abandoned. True story, my grandmother is frantic. This happened today.

May 30, 2012 06:38 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Hi Melissa. Yes it does sound like vandalism. Unfortunately the lenders hire 3rd party asset preservation companies to handle this for them. They rely on the company being honest and not doing work that's not required. Call the lender and raise a stink. They should be made aware of this. If damage was done to the house then file a police report and send it to the lender and the insurance company.

When this happens to me I send my locksmith over to make me a key. When I take a vacant listing i place a notice on the door that the property is being maintained and to call me if they need access or have any questions. Tape it right above the doorknob. Add that entering without notice will be considered tresspassing and the police will be notified. You see these notices on REOs all the time. Put them on the short sales. Then if they break in you have some recourse.

What lender is it?

May 30, 2012 06:47 AM

Pam Graham

All Real Estate Options - Jacksonville, FL

Jacksonville, Clay & St Johns Counties

I had a field company call me and ask if one of my listings was being maintained. That was a much better way of handling it. They never tried to change the locks and called me yesterday to see if the house had closed, which it did yesterday as well. Melissa's example above is just plain crazy!

May 30, 2012 06:51 AM

Dr. Paula McDonald

Beam & Branch Realty - Granbury, TX

Granbury, TX 936-203-0279

Seems like a no-brainier. I am always amazed at how people let the property go to the toilet when in trouble.

May 30, 2012 08:04 AM

Melissa Zavala

Broadpoint Properties - Escondido, CA

Broker, Escondido Real Estate, San Diego County

This and the ramifications from not caring for an abandoned property can create a huge nightmare. What a timely topic!

May 30, 2012 09:48 AM

Morgan Evans

Douglas Elliman Real Estate - Manhattan, NY

LICENSED REAL ESTATE SALESPERSON

I can't imagine what it would be like to come home to a scene like that, but it's a reality I'm sure many people face daily. Understanding that this could happen as a part of the short sale process would be invaluable to know up front.

May 30, 2012 11:20 AM

Melissa Grant

A Serendipity World - Greenbackville, VA

The Law of Attraction In Life & Business

It's PNC Bank. They are doing AWFUL things to my grandmother. It's sad and sick !

May 31, 2012 11:38 PM

Melissa Grant

A Serendipity World - Greenbackville, VA

The Law of Attraction In Life & Business

Here's something else ; My grandmother has paid all taxes and insurances for years on her own without escrow. She has NEVER been late on them. I have the records in hand. PNC called the tax office, rerouted her tax bill for 2011 - paid them on the 18th of May - then sent her letter saying she needed to start escrowing the money. All AFTER they changed the locks and caused this damage. THEN on top of that, sent two other letters stating she didn't insure the property enough ( even though she insured for $10,000 OVER what the insurance company said she needed to, PNC said she needed $20,000 more and assessed her for taking out two other policies, one for hazard and one for flood. The insurance company even sent letters to the lender. All the while they modified ( gave forbearance ) on second mortgage and have been jerking her around with packet after packet on modifying the first mortgage. Both mortgages WITH PNC bank. She had paid second mortgage faithfully and while she is short each month on the first mortgage PNC was claiming to be working with her. They have not FILED any other paperwork whatsoever since 2010 when the Lis Pendens was filed and 2 months later the forbearance. She has receipts for lawn service, has has the electric and the water going and my aunt who lives down the street, 3 houses down, watches and maintains the home and all of this has been reported to PNC. They did what they did anyway. We called Safegaurd and they were NASTY, saying bank has right to ownership call them, when we questioned them on the damage they caused - their response - they do whatever means necessary to secure for the owner. Owner ? My grandmother is the owner - NOT the bank. We called PNC and demanded the lockbox code and/or a key, they said get a lawyer. In the meantime, my grandmothers stuff is being held hostage. She can barely afford a Lawyer because of all the assessments they have charged her for and the maintaining of the home. No wonder why people just walk away - this is sick and twisted !

May 31, 2012 11:52 PM

Katerina Gasset

The Gasset Group & Get It Done For Me Virtual Services - Provo, UT

Amplify Your Real Estate & Life Dreams!

Bryant- It is interesting because I think so much has to do with the areas where short sales are located. Here in Wellington and some of our surrounding towns a house would never get to this point. Out of all the short sales we have done, we have not had one where the sellers did not take care of the properties. We have had some where the tenants trash the properties when they get evicted from the house by our sellers. We have had some where squatters moved in to vacant listings but not in Wellington, it was outside of Wellington. Our town is also VERY tough on keeping properties up. They will mow the lawn if you don't in two seconds.

But I also work with brokers in parts of Southern California and New Mexico for instance where their very lives become in danger on some short sales that head towards foreclosure. I know a broker who went to do cash for keys with her sellers and the husband put a gun on the table pointed at her. She was scared to death.

Jun 01, 2012 08:37 AM

Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers Designated Broker Leolinda Realty

Leolinda Realty - Surprise, AZ

Sun City Grand in Surprise Arizona

Your blog serves as a great reminder to homeowners who are considering a short sale. It's always concerning when a pool is not maintained. Whenever I hear of a drowning, I wonder if it's occurred in a short sale property. Banks truly need to protect their assets.

Jun 01, 2012 01:08 PM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Hi Melissa. PNC is the worse. I would send over a locksmith and gain access to the property. A locksmith can easily make a key. At least that way you can work on securing her personal items. She does need to seek legal advice. If she can't afford this call the county and see if they have free legal aid for the elderly. Most do.

I would also notify the police, secure the property and put up a no tresspassing sign.

Jun 01, 2012 10:00 PM

Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

THe key is to maintain the proeprty while awaiting a closing, simple right? If you let it go the bank will protect itself... well said, Bryant.

Jun 01, 2012 10:09 PM

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