Lenders who suspect that a property on which they hold a mortgage may be abandoned (and the homeowner is behind on payments) routinely hire “property preservation” companies to break into the property, winterize it (to prevent damage from frozen pipes) and install new locks to secure the property. Such a property is considered “pre-foreclosure.”
“We call it a drill-out, not a break-in,” an asset manager for one such firm told me. She said, “A break-in denotes a crime, but we’re authorized in the note to drill-out the lock and secure the property.” She was referring to that lengthy promissory note which all homebuyers sign (without reading) at the closing table.
To the homeowner, and to me as the listing agent, such action is borderline criminal, especially when the company knows it is listed and doesn’t call the listing agent first. Last week a neighbor of one of my listings — a lender-approved short sale that is closing soon — called me to report that a man was trying to break in. She gave me his name (Joe) and cell number and I reached him before he had finished breaking in. Joe stopped what he was doing but had already done so much damage that my seller could only get in by using her garage remote. “My sign is in front. Why didn’t you call me,” I asked Joe. He said that his work order said not to call me. The asset manager I spoke with verified that this is Fannie Mae’s policy.
I have reached out to agents who list more distressed properties than I do. You can read some of their horror stories, including thefts of appliances, and submit your own horror stories on my blog, at www.JimSmithBlog.com. [See posting below]
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