Let's say you fell behind on your mortgage, but haven't lost your home to foreclosure yet, and one day you come home to find that the bank has changed the locks on your doors and you can't get inside your home. How could this be? Are they allowed to do that?
If you're still living in your house, no, your bank isn't allowed to change the locks on your house. Even if you fell behind on your mortgage payments or are in foreclosure.
You're allowed to live in your home during the entire foreclosure process. If you're still living in the house after the home is sold in a foreclosure sale, the bank has to evict you before they can change the locks and take over the property.
But there is one exception that allows the bank to change the locks on your property even if you still legally own your home: when the property is abandoned and sitting vacant. Then it doesn't matter if foreclosure isn't complete yet or not.
There may be a clause in your mortgage that says the bank can do what's necessary to secure the property and protect its value in the event it becomes abandoned.
Your home is collateral on the loan you took out to buy it, so your lender will try to protect it when things don't go as planned. And changing the locks isn't the only thing they can do.
Steps the bank will take to secure an abandoned property:
- "Trash out" the property by removing everything left in it
- Drain waterlines and prepare the property for winter ("winterizing")
- Make repairs to the structure
If the property's really abandoned a little bit of effort to protect a house when it first becomes vacant can prevent much more serious and expensive problems down the line, so it makes sense for the bank can take these types of actions when it finds itself foreclosing on an abandoned property.
Why would the bank think your house is abandoned when it's not?
But all that's only supposed to happen when the property is abandoned. What about when the bank thinks the property is abandoned, but you're still living there?
When you stop paying your mortgage and don't have any contact with your loan servicer (the company that accepts your payments and credits your account), they will want to know if you're still living in the property or not.
Maybe you just had a temporary hardship, but are still living in the home, are maintaining it, and are committed to doing everything possible to keep it. Or maybe you've started a new life in another state and criminals have set up a meth lab in the house.
They don't know one way or another until they check. To find out if the property is occupied or abandoned servicers will hire a field services company to go to the house, make a determination, and do what's necessary to secure it. And it's possible for the field services company to think the property is abandoned when it's not.
The thing is, determining whether or not a home is abandoned is subjective.
Honest Mistake
Maybe you're out of town and the lawn is overgrown or the home looks like no one's taking care of it. That could cause them to believe the property's abandoned. Then you come home and your key doesn't work and your personal belongings have been thrown out. Oops.
Convenient Mistake
It's also possible for the employees of the field services company to use bad judgment on purpose when evaluating a property or just plain lie and say a property's abandoned when it's clearly occupied. They are paid more money for the services they perform on abandoned homes, such as changing locks and removing property, which gives them an incentive to deem the property abandoned.
There are terrible stories of field services company workers illegally breaking into houses that are still occupied, throwing out family heirlooms, removing pets, and lying to homeowners. They've even trashed homes that were paid for in cash!
What can you do?
If the locks are changed on your home when you're still living there and you're still the owner of the property, you can:
- Break off the bank's locks and replace them with your own. It's still your property, so you can do what you want.
- Call your servicer and tell them your house isn't abandoned and demand that they treat it as an occupied property.
- Call the field services company if they left their information and tell them they made a mistake.
- Get an attorney. Foreclosure is too important of a legal problem to try to navigate on your own.
You should receive some kind of warning or communication from your servicer before they send a field services company to your home. Don't ignore it. Anything posted on your door, sent to you in the mail, or left as a voicemail should be taken seriously.
And it's a good idea to call your servicer and write them a letter letting them know that you're still occupying the property when you fall behind on payments. Remember that, even during foreclosure, you're still responsible for maintaining your home and still allowed to live in it.
The services of a qualified foreclosure defense attorney are invaluable when you have problems with your mortgage. An attorney can inform you of all of your rights and help you assert them to the fullest.
