Last year, this blog discussed a lawsuit filed by Illinois Attorney General Lisa Madigan against Safeguard Properties (“Safeguard”) alleging that various acts of wrongdoing by the company in the course of its business maintaining and securing foreclosed homes. Specifically, the lawsuit claimed that Safeguard had illegally prevented homeowners from entering their residences by breaking in and changing locks or shutting off utilities while foreclosure proceedings were ongoing.
Now, Safeguard is back in the news as Local10, a Florida News outlet, reported that the company was at it again, mistakenly foreclosing on a couple’s home while they were on vacation. According to the couple, they returned from vacationing in New York to find that their Coconut Creek, Florida home had been foreclosed in December, even though they hadn’t had a mortgage in 15 years.
Apparently, Safeguard had been hired by a bank to take over a property six buildings down from the couples’ unit in the Karanda Village complex. Safeguard had placed a lock box was on the door, turned off the power, cleaned out the kitchen, and changed the locks.
A Safeguard spokeswoman commented, “Safeguard has acknowledged the error and has been working with the homeowner to resolve it. Errors such as this are rare, and we are sorry when they occur.” Based on the Illinois Attorney General’s lawsuit, however, it would appear Safeguard’s “errors” are more common than the company would have the public believe. According to the lawsuit Safeguard has engaged in practices such as removing possessions, causing damage to properties, and running off residents that have fallen behind on mortgage obligations but are still legally entitled to occupancy of the property.
Partially to blame is the inability of lenders to deal with a recent influx of foreclosures, forcing them to turn to companies like Safeguard to secure and maintain foreclosed properties. According to realtytrac.com, one in every 811 properties in Illinois is currently in foreclosure. Although the number of foreclosures in Illinois is slowly decreasing, it still ranks fifth among U.S. State for number of foreclosures.
Illinois law provides that a property owner that has defaulted on his or her mortgage is permitted to reside in the home until the foreclosure process has been completed. Further, before a mortgage-holder can take possession of a property, it is required to state obtain a court order, even if the property is perceived to be abandoned. The lawsuit alleges that Safeguard has engaged in intimidation and fraud to force residents out of their homes and asserts that Safeguard has not properly trained or supervised its contractors.
In 2012, five banks and 49 state attorney generals entered into a $25 billion settlement requiring the banks to improve oversight of third-party service provides such as Safeguard. It would appear, however, that, despite this settlement, companies such as Safeguard are still engaging in unscrupulous, and likely illegal, conduct.
Contact an Attorney Today
If you have questions regarding the rights and obligations you have as property owner or believe you have been the victim of the unfair practices of a lender or its contractors, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.