Posted by kwack41 on September 23, 2004 at 23:24:33:
Thanks JT - sometimes it’s the small victories!!
Preforeclosure Problem…Bank Locked the House - Posted by mark
Posted by mark on September 23, 2004 at 10:06:22:
A couple months ago I had a seller put his house into trust…make me trustee and all the regular stuff. I gave him some moving money and he vacated, I put in new A/C and carpet, painted inside and out and put a For Sale sign up.
I never recorded the deed or reinstated the loan thinking I’d sell before too long. Now the bank has put a lock on the door and their representative who put the lock on the door says it won’t be removed until a sale is complete. At this point since the house is vacant I figure its too late to reinstate and I’ll have to pay it off in full.
Does anyone have any ideas or experience with this problem. I do have several people waiting to get inside wanting to buy. Thanks
Bank Locked the House - Posted by kwack41
Posted by kwack41 on September 23, 2004 at 15:59:29:
I just had this happen on a short sale I’m working. The bank secured 1/2 of a duplex because it was vacant. Seems sort of odd to me since they had to cut off the existing lock to “secure” it with their lock.
I called the number they left posted on the door on they mailed me the key to the lock. If it makes them feel better I don’t have a problem with it, besides, it was a nice lock;)
Re: Preforeclosure Problem - Posted by Kevin IL
Posted by Kevin IL on September 23, 2004 at 15:02:50:
The other posts are correct. I was in court recently and saw this first hand. A couple had been in the process of moving out and the bank secured the property. The judge told them that they still owned the property and the could re-enter and change the locks right up until their ownership rights were extinguished.
Re: Preforeclosure Problem; Bank Locked the House - Posted by B.L.Renfrow
Posted by B.L.Renfrow on September 23, 2004 at 13:37:58:
As one who does some field service work for various lenders now and then, both the bank and JT-IN are correct. You can be sure the note and mortgage signed by the mortgagor gives the lender the authority to secure their collateral if it appears to be abandoned or at risk of damage.
The bank is not interested in preventing the lawful owners or their authorized agents (like you) from gaining access to the property. They ARE interested in keeping out squatters, neighborhood kids or vandals.
In addition, particularly in the colder climates, if the property is empty the bank will request winterization, where the water heater and lines are drained, antifreeze instilled, etc. Since frozen/broken water pipes can cause thousands of dollars in damage in short order, you can understand their concern. I am authorized by the client (bank) to gain entry by whatever means necessary in order to perform the work. After forced entry, if the property is not secure, I will change the locks, board up the windows, or whatever.
Now, if I knew a property had been winterized, and it was secure from casual entry, I would not recommend to the bank that the locks be changed just for the heck of it. In addition, if I encountered an owner at an abandoned property and they told me they were trying to sell the property, I would have no interest in trying to keep them from accessing their own property, as long as it was secure.
However, if I found the property unsecure on subsequent inspections, I don’t care how many times you remove or damage the bank’s lock, it will simply be replaced, and telling me or the bank where to deposit the key will have no effect.
And whether you recorded the deed wouldn’t make any difference as far as the bank securing their collateral. They still have their security interest no matter to whom the owner has transferred title.
I have dealt with this issue from the other side too. I once had a property I’d taken subject-to but not yet reinstated the loan, and I left some tools and new doors and such in the property, only to find the locks changed and all my stuff missing the next time I came by. I know the field service guy most likely stole the stuff, but of course I couldn’t prove it, so I was SOL. Just something to keep in mind until you get this situation resolved.
Hope this clarifies the question for you…
Brian (NY)
Change the Locks again… - Posted by JT-IN
Posted by JT-IN on September 23, 2004 at 10:17:41:
Mark:
The Bank has a right to protect it’s asset, if it is sitting unattended and unsecured. They do not have a right to “Lock-Out” the owner or his designated representative, prior to a lawful sale, assuming that they still want to occupy, market for sale or use the premises in any way. The owner of the property is the owner of the property, not the Bank…
I would forecefully be telling them where to deposit the key to their badly damaged and discarded lockset… And yes, you may cure the default right up until state law says you can no longer do so… or based upon what is written in the Mtg (or Deed of Trust), providing it is within the guidelines of the laws of your state.
If you have taken this property “subject to”, you should know what the mtg docs say regarding “reinstatement”. If you don’t know now, then make it priority one… or Two, after calling that pesky Bank… LOL
Just the way that I view things…
JT-IN
Re: Bank Locked the House - Posted by Jack
Posted by Jack on September 23, 2004 at 19:46:34:
Don’t be surprised if when you go over the Settlement sheet there is a $165 property preservation fee that they try to add on top of your agreed purchase price.
Nice Lock… LOL - Posted by JT-IN
Posted by JT-IN on September 23, 2004 at 18:37:26:
Two reasons that they like to change locks… one is that it secures othewise unsecured properties, per their rights in the mtg agreement. The other reason is that it gives them a perfectly good and legal excuse to enter the property to inspect it’s condition. This allows them the opportunity to formulate their strategy as to short sale, full bid at sheriff’s sale, or attempt to do a workout with the Debtor…
The nicer the collateral, the more stringent that they are to deal with… Congrats on the new lock…
JT-IN