SHORT SALES: Banks WILL Change Your Locks Prior To Foreclosure

By
Real Estate Broker/Owner with Rulnick Realty, Inc.

house lock

A disturbing trend is emerging in the Short Sale world.  In the last two months, I have had locks mysteriously changed and signs removed on two of my Short Sale listings, one in Gulf Breeze Florida, and the other in Santa Rosa Beach Florida.  In both cases, I had lockboxes on the properties.  The houses were vacant, with sellers out-of-state.  I am certain the mortgage lenders performed the lock changes.  In instances where properties may be considered abandoned, the lender may secure the property.  The bank's rights are commonly stated with language as follows, from a standard Freddie Mac mortgage:

9.   Protection of Lender's Interest in the Property and Rights Under this Security Instrument.  If .... Borrower has abandoned the Property, then 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.  Although Lender may take action under this Section 9, Lender does not have to do so and is not under any duty or obligation to do so.  It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 9.

In the case of the Santa Rosa Beach property, I had an ACTIVE OFFER working with the lender, Saxon Mortgage.   Apparently, the banks' property preservation departments got a little overzealous, and didn't bother to call my LARGE telephone number on the SIGN in the front yard.  In two other instances, I have had the property preservation companies call me first, and ASK if they could change the locks.  When I told them I had the house actively on the market, they backed off.  But obviously, this is not always going to be the case.  Each lockbox I purchase is $90.  My signs are $70.  They now have been stolen.   Every time this happens, my choices are:

1. Change the locks back at a cost of $100.00, and install another $90 lockbox - for potential loss of $190 (in addition to the $160 in property I've already had stolen)

2. Re-install another $70 sign, and risk that, too, being stolen

3.Try to track down the property preservation company by going through endless loops at each bank, and somehow recouping my property and regaining access

4. Removing the listings from the market

In conclusion, Short Sales, touted as the top alternative to foreclosure by the lenders themselves, are being physically prevented BY the lenders themselves.

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Search Destin Florida real estate

Short Sale Pre Foreclosure Help.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email itswendy@rulnickrealty.com

Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Crestview, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   Wendy Rulnick, Broker and Realtor, has been selling real estate for 20 years.  She has won numerous awards, including the coveted ADDY for advertising design. Wendy is in the top ½ percent resale agents on the Emerald Coast, and was featured in Kiplinger Personal Finance Magazine as a short sale specialist.

All Rights Reserved. *SHORT SALES:  Banks WILL Change Your Locks Prior To Foreclosure"* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2009 by Wendy Rulnick.This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice.  The information provided is for educational and informational purposes only.  It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.                                                                                                                      

Subscribe in a reader

Subscribe to It's Wendy's Blog by Email

Posted by

"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-650-7883 ext 204

email itswendy@rulnickrealty.com

www.rulnickrealty.com property searches and community info

 

Wendy Rulnick is the marketing choice for sellers on the Emerald Coast who want to list and get their homes and condos sold in Destin, Sandestin, Bluewater Bay, Santa Rosa Beach, 30-A, Watercolor, Seaside, Rosemary Beach, Seacrest Beach, Kelly Plantation, Regatta Bay, Destiny and more.

Rulnick Realty

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Location:
Florida Walton County Santa Rosa Beach
Groups:
Foreclosure Talk
Short Sales and Forclosures ONLY
Short Sale Specialists & Pre-Foreclosure Education
Short Sales Specialists
Short Sale REALTORS®
Tags:
preforeclosures
short sale lock change
santa rosa beach florida short sales
gulf breeze florida short sales

Spam prevention
Show All Comments
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Valerie-  Indeed, very frustrating.

Laura - You are right.

Jan 19, 2009 12:47 AM #11
Rainmaker
434,438
Dick and Dixie Sells
Sells Real Estate, LLC - Trinity, FL
Realtors, Tampa Bay Florida Homes For Sale

Yes Wendy we have had that happen as well on two listings in the past 60 days.  Luckily they left the lockbox and only changed the front door locks and not the back.  Just a heads up!  It took three weeks to get the key from the bank and I am waiting on the other one. One of these has 2 active offers on it and the other had a file open.  I just don't  get it . We are located in Tampa Bay and one of the banks said they were going in to "WINTERIZE"  the home. It was 70 plus degrees  HELLO!  Another fun day in the short sale game.

Dixie

Jan 19, 2009 09:59 PM #12
Rainmaker
320,116
Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049

Wendy:  I just had the same thing happen in Colorado Springs on one of my short-sale listings last week; and we've actively been negotiating on an offer that the bank has received.   Also, they winterized the home, even though my sellers had been paying the electric bill on it.  Then they went one step further and sent workmen in to fix a cracked window.   Crazy stuff .....

Jan 19, 2009 11:07 PM #13
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Dixie - I fear it will get worse!  Next time, maybe I'll file a police report :)

Kathy - Wow, this is really the new trend.

Jan 19, 2009 11:27 PM #14
Rainmaker
76,303
Natalie Langford
Realty Negotiations - Winchester, VA
Winchester, VA Real Estate

Hey, Wendy.  Thanks for your tweet.  I have a group question.  What if the homeowners are current on their mortgage, or just over the 30 day lates?  Is there a line crossed once homeowners have stopped paying the mortgage, or is the line the minute the short sale is presented for 3rd party approval? 

Either way, thanks for the "heads up."

Jan 20, 2009 08:14 AM #15
Rainmaker
788,382
Carol Zingone
Berkshire Hathaway Home Services Florida Network Realty - Jacksonville Beach, FL
Global Realtor in Jax Beach, FL - ABR, CRS, CIPS

Good post, Wendy - it's amazing to me how different "arms" of the same lender can be so out of sync with each other...

Jan 20, 2009 09:40 AM #16
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Carol - I got lucky - I called and made a fuss with Saxon Mortgage.  They are express mailing me the keys!!  But this is going to keep happening to all of us.

Jan 20, 2009 09:43 AM #17
Rainer
37,435
Cynthia McKenna
Keller Williams Realty Homes & Estates - Hauppauge, NY
Broker/Owner Comprehensive Real Estate Services

I had the same thing happen to me on two short sales.  On one, the bank had the home locked and you could see my lockbox on the floor inside and the other you could not see in the window. 

The home that I could see the lockbox, no one would admit that they changed the locks.  Out one lockbox. 

The other home I was able to gain access through the securing companies lockbox.  They stated that my lockbox is in the home, it is not.  I have a pending offer, so when it closes, I will keep the lockbox on the door!

 

Jan 24, 2009 06:16 AM #18
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Cynthia - Lockboxes start adding up fast!  I just sent one of my staff 50 miles to put our sign and lockbox on a new vacant short sale listing.  Guess what? Of course, the key the seller sent us no longer works.  The lock's been changed.  SO, there's 100 miles of gas, two hours of employee's time DOUBLED when he has to go out again. grrrrrrrrr

Jan 24, 2009 06:23 AM #19
Rainmaker
978,675
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Those expenses add up fast - not to mention the time and effort involved.

Another agent and I list REOs for a bank;  recently we discovered our new assignment was in the MLS as a short sale.  We called the agent, he said he had a short sale offer into the bank, was waiting for an answer.  In the meantime, the bank proceeded with foreclosure, so the asset manager called the listing agent, told him to remove the property from the MLS as it no longer belonged to the owners. Apparently the owners knew all along they had been foreclosed on, but chose not to tell the listing agent!  It's crazy out there and I felt bad for the listing agent!

Grrrrrr is right!

Jan 26, 2009 05:29 AM #20
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Susan - I've had similar situations.  Our public records are hard to track for upcoming foreclosures without checking on each specific seller name.  Tons of time when you have a LOT of listings.  I've had sellers sign deeds-in-lieu, claiming they didn't really understand what they were doing, while I am working on their short sale...  It is crazy out there!

Jan 26, 2009 05:34 AM #21
Rainmaker
310,483
Jared Hokanson
Hokanson Realty & Jared Realty Group - Medford, OR
Your Home Sold, GUARANTEED!*

Wendy,

I recently had the locks changed on one of my short sales as well.  The preservation company put a sticker on the door with their contact number.  We called them and they sent us a copy of the keys.  It took a few days, but we got them.

Feb 07, 2009 05:45 PM #22
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Jared - Since I wrote this post - it's happened to me FOUR more times.  The prop preservation companies are just hungry for their $100 lock change fee, and are NOT doing due-diligence! Glad you got keys!  I have called ASC three times to get keys to one of the properties, and somehow, AHMSI "lost" my letter of authorization so I am waiting to contact them to get keys to the another property! The company didn't leave ANY notice on the door!  My area is mostly non-owner occupant, so this is really becoming cost-prohibitive for me.

Feb 08, 2009 02:25 AM #23
Rainer
3,400
Joanne Johnson
West County, MO

I am beginning to believe that because of the bailout, banks aren't approaching short sale offers in a logical manner. They seem to hold on to inflated appraisals and bpos rather than acknowledge the updated cma I submit with each offer. Ultimately, they will end up selling a foreclosure for a lot less than the offers they have already refused.  So much for the concept of LOSS MITIGATION, because they certainly aren't practicing it.

Feb 14, 2009 01:34 PM #24
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Joanne - You might be right about the bailouts making them LESS efficient.  I have written my Senator and am going to start a massive grass-roots uproar in one of my upcoming blog posts.  We've got to band together and make them get with the program!

Feb 15, 2009 02:48 AM #25
Rainer
15,900
Stephanie Lim
Lim Team with Keller Williams Realty Jacksonville - Jacksonville, FL

I've had this happen two times in the past week on my short sale listings.  Neither have a judgment of foreclosure yet, and one has not even had a lis pendens filed.  Luckily on one they put the new key in the lockbox and on the other they just changed the top lock (yeah!  makes sense...leave it more unsecured than it was in the name of securing it.)

At least they also "winterized" it...you know how important that is here in Florida!  :-)

Feb 18, 2009 04:46 AM #26
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Stephanie - Just about anyone can get on a "list" to do lock changes..    They are just scrapping for dollars- no other reason!

Feb 18, 2009 05:23 AM #27
Rainer
157,024
Tom Boos
Sine & Monaghan Realtors, Real Living - Grosse Pointe Farms, MI
Providing the very best of service to Sellers and

Wendy:  You are absolutely right.  Once the lenders determine the property has been vacated, all bets are off!  Thanks for reminding all of us of this situation so we can be extra vigilent with our listing such as these.

Mar 05, 2009 01:53 AM #28
Rainer
22,573
KB Collins
Keller Williams Associate Broker / Attorney - Bayside, NY

I had the same type of posting on my blog... Mine was a little more irate than yours but same point.  This practice should be stopped and not allowed.  I would think that duediligence should prevail not just an agent for the bank, going to the home and saying mmm looks empty.

Acceptance of this practice is just another nail in the coffin of the distressed homeowner where banks take advantage.

I hope we stand up and protest soon.  If we do not, it could be your lock changed next time.

KB

May 06, 2009 03:03 PM #29
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Tom - Well, they have changed locks when properties are NOT vacant! A local Realtor called me last week and told me a Santa Rosa Beach rental property, furnished with power,etc, had locks changed and FLAT SCREEN TV STOLEN by the prop preservation company!!!  I too have had locks changed on rental properties with power on, maintained, etc.  Enough is enough!

KB - YES YES YES absolutely right!!!

May 07, 2009 01:33 AM #30
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
497,201

Wendy Rulnick

"It's Wendy... It's Sold!"
Ask me a question
*
*
*
*
Spam prevention

Additional Information