Couple Who Paid Off Mortgage Find Their House Mistaken As Foreclosure

Safeguard, a Delaware corporation based in Ohio, is the largest privately held company in the United States hired by mortgage lenders to determine whether a home in default or foreclosure is still occupied.  They are to determine if foreclosed homes are vacant and if so, to ensure it does not lose value .

Safeguard however, has secured occupied houses in foreclosure, and secured houses not in foreclosure.  It happened to a couple from Coconut Creek, Florida.

 

Mel and Harriet never missed a mortgage payment and paid off their mortgage 15 years ago.  Recently, they returned home from a trip to New York to find that someone had broken into their house.  The locks had been changed, the power was turned off, and some of their personal possessions were missing.   Only, it wasn’t a burglar.  It was Safeguard.

Attorney Scott Sobol described SafeGuard’s actions as “legalized burglary.”  Not only was the couple’s home “musty” because of the power being off, but they suffered embarrassment at the idea that their neighbors would think that their home was foreclosed.

Mel and Harriet

 

WPLG got a statement from SafeGuard:

“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.”

Hopefully Safeguard will resolve the problem, but that doesn’t solve their other problem in the State of Illinois.  In September 2013, Illinois Attorney General Lisa Madigan filed suit against Safeguard, accusing them of unlawfully breaking into homes and illegally evicting struggling Illinois homeowners well before a foreclosure is finalized.

The lawsuit against Safeguard is filed in the Cook County Circuit Court.  Attorney General Madigan alleges that Safeguard routinely winterized and secured homes where the occupants still had a legal right to live in.  In many cases, Safeguard’s contractors broke into homes, changed locks, turned off utilities, and removed the personal possessions of occupants in spite of clear evidence that the homes were occupied.  Homeowners and tenants have a legal right to occupy a home until the completion of the foreclosure process.

“This case shows the lengths that banks and their service providers will go to abuse and intimidate borrowers in foreclosure,” Madigan said. “This company was illegally breaking in to people’s homes, removing all their possessions and locking them out. It is a homeowner’s worst nightmare.”

Among the most egregious examples cited in Madigan’s lawsuit, an Illinois homeowner on at least a dozen occasions told Safeguard he was still living in his home, yet he returned home one day to find his front and back doors broken into with a sledgehammer.

A member of the U.S. Armed Forces was in the process of a short sale on his property.  He attended out-of-state training and returned home to find it had been broken into, the locks changed and utilities shut off.

Another homeowner, who had fallen behind on her payments but had not entered default, returned home to find it had been broken into.  The locks had been changed and the water shut-off.

It’s very suspicious that Safeguard appears to know when occupants are not home.

In the State of Illinois, the Sheriff conducts evictions, putting all property in the house into plastic bags and sitting them on the curb.  Where is Safeguard putting the removed property?

There’s another side to this that is not reported, and I find it scary.  Why do utility companies shut-off service without legal documents transferring the rights of the homeowner/account holder?

A few years ago I helped a friend file for an order of protection against her abusive husband.  The court granted the petition and ordered him out of the house.  The utilities were in his name only, and he had not paid the bills for several months so shut-off notices arrived and my friend did not have money to pay the outstanding balances.  The utility companies would not make payment arrangements with her because the account was not in her name.

Cartoon by Ron Leishman

It was even worst, because in an act of retribution, her husband contacted the garbage disposal company and put the service on vacation hold.  For three weeks, my friend’s garbage was not picked-up and the company refused to re-establish service without the account holder’s consent.

In her case, she had an order of the court that removed her husband from the residence.  We went to the courthouse to get certified copies of the order.  For an entire day we ran around faxing or delivering that order of the court to utility companies so they would open new accounts in her name.  With one utility company, we were on hold on the phone for half an hour just to get their fax number.

Is Safeguard shutting-off power in those homes through utility companies and if so, are they forging court documents?  In the alternative, if Safeguard is turning the power off from inside the house, such as by way of shut-off valves, then it’s a deliberate act to circumvent needing to prove that it’s a lawful discontinuance of service.

In other words, local government needs to pass law requiring that companies like Safeguard not shut-off power themselves, but only through utility companies with an order of the court.