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Washington Mutual Alert- They've crossed the line big time !

So as you may have read over on Mike Mueller's blog entry (WaMu Locks Single Mother Out of Her Own Home), today I had a horrible phone call, the kind you don't want from a client. Someone had changed the locks on her house! We are in the middle of short sale negotiations right now. We are close, they've ordered an appraisal , we're getting there and wow, what a shock to get this call from my client.

For those of you who are, or have ever, done a short sale with WaMu, you know they are notoriously slow to react, slow to process and just in general, nonsensical in some of their decision making. This one takes the cake.

Mike Mueller made a phone call and within 20 minutes I had a guy from WaMu's Florida Property Preservation Team on the line. He told me I'd have a call back this afternoon from their servicing company (Fidelity) to get me access again. I said NO WAY are you providing me access, you are getting me a key, period. Further , I will recommend my client changes the locks again to secure HER property until such time that it is theirs (if short sale fails), and THEY will get the bill for the lock change.

I told him that not only did I suggest that my client file a police report, but to file a formal complaint with the DA or whoever will listen. She also consulted with her attorney today. IT IS AGAINST the law to change the locks on someone until it is YOUR house. She has personal property in that house. Think of the liability they now have if anything is missing. They trespassed. Heck, without a key, they probably also broke in and entered.

Both WaMu and Fidelity apologized. But this is not the end. We have done everything in good faith to get this short sale done. And to help THEM avoid a foreclosure on this property. What they did with the locks was illegal. The problem is they're probably getting away with it all over. And if the house was vacant and unattended they probably never get caught. But this time they did. Shame on you WaMu and Fidelity.

Posted by Catherine Myers, Walnut Creek, CA Real Estate on 07/30/2008 07:34 PM

Comments (29)

wamu, washington mutual, foreclosure, short sale, problems

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29 Comments on Washington Mutual Alert- They've crossed the line big time !

JUL

2008

Way to put them on alert. This will be at the least accessable by attorneys who may have clients that this has happened to.

I too am in a state of shock that they could do this. I hope your story gets more attention! Lucille Noble (Weichert Dunhill Real Estate - Osterville, MA)

WaMu is a little too big for their britches! But that is OK because they will be brought down by the market!

Russ, well maybe..... they just really need to sit back and reassess their entire process leading to a foreclosure - its broken in my opinion.

Lucille... will be interesting if anyone chimes in with a similar situation.

Gary, yup, you are probably right about that.. they are taking a beating.. many of my short sales are with them. For my 18 or so short sales now they are almost all with one of 4 banks: Wells; WaMu, Countrywide and B of A. I have a couple with others i.e Carrington, Homecoming, Chase, EMC, Citimortgage and others... but the biggies are taking the brunt.

Giving the benefit of the doubt maybe it was a clerical error that led to this. Let us hope, anyway. Otherwise it's a bad business practice that will probably end up as a class action lawsuit costing them millions more than the untold monies they are already losing on these non-performing loans.

Well Chris, I would think that except that someone in my office shared (when they heard me ranting about it) that the same thing happened to their clients last week !

Hi Catherine, Just amazing isn't it ? The agents work so hard to make these work for all concerned and then some idiot wearing a tie screws the whole thing up !

Catherine, I am not surprised for several reasons. In a large organization, the right hand often doesn't know what the left hand is doing (i.e., different divisions may be in direct conflict of each other). Also, when you are about to fail unless you get some help, you often take drastic measures. Keep track of the solvency of other banks as our sub prime crisis continues. AJ

JUL

2008

AJ, true, but I don't buy it in this case.. all parties KNEW and KNOW when the trustee sale date is schedule and they just thought they could get away with it. They are taking liberties they have no business taking.

Catherine - I hadn't heard of this one before. I can't believe they can get away with this prior to the trustee sale. Please let us know the outcome...

I HOPE WHO EVER MADE THAT ORDER OF CHANGING THE LOCKS @ WAMU ON THAT POOR LADY DIES.

So wamu think they are above the law. That is not cool. I hope the short sale closes for you.

I am or was in the process with a short on BofA. I have a short pay off good til 8/2/08. They foreclosed on 7/26/08. I know banks can have foreclosure in different departments, shame on me for not keeping up on that file, but I could have saved them thousands!

Oh well, its their money! (Or is it the tax payers?)

SEP

2008

As a preservation contractor it is our responsiblity to determain if the house is still occupied. IE: Utilities on, furniture inside, and so forth. Our firm would never get caught doing this. I have been in the business since 1986 and have never locked a person out of their property. I can only assume the contractor just was after the lock change fee. The legal fee's are going to be a lot higher than what he made. It is our policy to verify the occupancy prior to changing locks. Also we post a notification of our local number so that the legal owner can contact us or the collaterial holder. When is comes to personal property located on site we video the project and take still photos to document the belongings. As the saying goes one mans junk is another mans gold. Alot of banks are now have us secure the property if it is vacant, this protects the property from vandlism, it also gives them a idea of the current condition of the interior. If the property has been destroyed they can go back on the insurance company for up to one year and recover the damages. Brian

SEP

2008

WOW! That is unbeleivable! I had a servicing company change just the back door lock but not the front door. Maybe I should have put up a fuss then too...

OCT

2008

This same situation happened with my condo! Both my realtor and myself called WAMU to tell them the property is secured and the Short Sale negotiations are under way. And still they changed my locks. I'm sorry this happened to this single mom. Real action needs to be taken against whoever did this.

Isn't that tantamount to an illegal eviction and can be punishable by triple damages in some states?

OCT

2008

We just had this happen to us - The contractor went into the back window and the neigbor (who was purchasing the home) asked him questions and he retreated. WAMU was going to re-key the home and there wasnt even a NOD filed - was crazy - If the neighbor/purchaser hadnt run him off, they would have locked out the existing homeowner.

NOV

2008

We arent' even 90 days past due, we still have furniture in the house and patio furniture outside. We got a notice that if it was vacant, to call WAMU. My husband called and said he was still living in the house upstairs ( the downstairs furniture we moved out) and they said ok. Then two weeks later, they broke in, changed the locks, taped up the toiltes, and put antifreeze in the pipes. We don't know who to turn to or what to do. My husband lost his job, so theres' no money for an attorney. We are trying to sell the house and do a Deed in Lieu. Everytime we call, WAMU says a different thing....help!

Hi Beth, WaMu unfortunately does have the right to "secure" their asset if they deem vacant and there is a serious delinquency. Do you have any other loans on the house? Deed in lieu's are not often accepted from what I can tell. Have they given you an indication they'll work with you on a deed in lieu? Have you tried a short sale? Have you called the FREE non profit housing counselors? If your husband lost his job though, and there is no way to repay you'll need to start finding other options for housing. If they have filed a notice of default on you, your time there may be limited before they foreclose. Where are you located?

We are in Oregon. I will look up the non profit housing counselors right now. There hasn't been a notice of default filed yet, because we are only 70 days past due. I called WAMU again a few minutes ago, and and they said we could not apply for a Deed in lieu or short sale unless the house is listed with a realtor, but now they've changed the locks, shut off the water. My dad says to get a realtor who specializes in short sales, and I've googled them in the Portland area, and don't know where to start, because everyone claims to be an expert! Thanks for getting back so quickly. We have secured a lease elsewhere, before our credit went bad, so we are ok for a place to live. My husband was staying in the house a few days a week so it was occupied. We have a first and second with WAMU, but the guy said the first was Freddie MAc and the second, Wamu. I think Deed in Liue would be best for our credit, then a short sale, then foreclosure, but I'm not sure. Thank you for taking the time to talk with me.

NOV

2008

Beth - WAMU does have the right to secure properies that appear to be vacant - if you call them they should work with you to get access. On a larger issue, it appears that you would be served well by meeting with a Realtor who specialized in Short Sales who can assist you with your situation. I work with a professional agent in the Portland area who is assisting a client of mine right now. Feel free to contact me if you want an introduction. BOB

Wow, Catherine. You now have agents trolling your post for referral fees. Very sad.

Beth - Listen to any advice Catherine may offer you. She's a true professional.

Beth, please take the time to see an attorney about your situation. There are many variables. If the loans you have are your original loans you may have some protections available to you even if you foreclose. This is a really stressful time, and a short sale can take months and require a lot of information from you. Which is fine if you do find the right agent. But just know your reasons for wanting to do a short sale. Sometimes foreclosure is ok and an option for your situation, but talk to an attorney and let them in on the whole financial picture and they can lay out pros and cons. I may sound silly saying this - but realtors aren't always the best resource to be able to advise you properly. People don't always realize that it really is legal advise they need first before proceeding in these complicated situations. There are housing counselors as I said before i.e. HopeNow.org and Naca.com. But again without a job and the ability to continue paying, your options may be limited.

Property Preservation contractors ARE required to determine if a property is occupied or vacant just as Brian pointed out. My husband does property preservation and often winds up at a house that is occupied - he does not change the lock. The typical work order is to change one lock only and that is a secondary door. If the house is vacant, the lock is changed. For lenders there is a fine line between vacant and abandoned. If it's not occupied, it seems the lenders figured it is abandoned and are trying to protect the collateral.

NOV

2008

Thanks, Catherine, once again. I did some homework and talked got several names of realtors who have been doing a lot of short sales in the area, from title companies. I interviewed then on the phone, and found a great group to work with. They have done 120 short sales to date as I write this. They were very knowledgeable and honest and I had a really good feeling about them. They were down to earth, and one of the realtors just went through the same thing, as her husband is a builder and they are not only losing the business, but their home as well. This group successfully shortsaled her home, and has had many successes negotiating to the point the the short sale is the end of it; no coming after us for the remainder of the 2nd mortgage. My husband and father-in-law will be living there full time from now on. If only we had known in the beginning what to do. Someone should write a quick book and publish it about what to do the minute you know your going to head towards foreclosure, and the mistakes to avoid! The Internet isn't clear enough and so many opinions, maybe you could do it! We are going for the shortsale and listing tomorrow.

As far as the Property Preservation; we had a notice put on the door. We called them and told them that although the most of the furniture was gone downstairs, my husband was still living in the house in the masterbedroom. We also called WAMU and notified them that the house was still occupied. My pots are out front, the gardening stuff and patio furniture outside. They changed the front door lock, and also the inside door lock that goes to the garage, so we couldn't get in with the garage door opener. There was also a bullet casing on the floor, which tells me he was armed. Pretty scary...

I'll keep checking the post and let you the end of the story. Wishing good things your way, Catherine, for caring about someone who is out of state, and taking the time to respond and give great advice...

beth

DEC

Catherine, I am shocked every day by practices like this. Lenders and banks think that they are the only victims and the consumers are responsable. We are all on the same boat. A boat that took a wrong turn almost a decade ago and we should all work things together to make it happens better. Lenders are affraid of people trashing houses before they abandon them. So let's put in place more comprehensive and faster programs to short sale or modify the loan. The process is way to slow or almost unaccessible to an uneducated homeowner on this subject and this is where the frustration starts.

Happy Holidays,

Christian Rousset.

DEC

WAMU has threatened my short sale sellers with lock changes as well - I've got an offer, and we finally have a loss mit person assigned, hoping for a mid-January closing.

APR

Wow! a lot of bad news with WAMU short sales, i faxed and later confirmed receipt of short sale package on March 9, packge was complete along with 3 offers and Estimated HUD's. i have been calling 2 times per week to see if negotiator has been assigned yet, they keep telling me that lately they are focusing more on Loan Mods than Short Sales so as it stands today its been 5-6 weeks and nothing yet, per selling agents buyers are still on board so thats a good thing.

does anyone reading this thread have a direct contact with anyone at WAMU in charge of short sales besides all the phone #'s that have been posted online? btw, my client has fallen 4 months behind now and they still dont prioritize my file and they still havent began foreclosure proceedings either. i guess all i can do is keep calling them until they get tired of me. any suggestions or ideas will be appreciated

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