An article published in the New York Times paints a disturbing picture of how the major banks may be using “property preservation” companies to bully homeowners in distress, damage their properties and even chase them out of their homes.
Lisa Madigan, the Illinois Attorney General, is the first AG to take on property management companies hired by JP Morgan Chase, Bank of America, Citibank and other lenders. On September 10, she sued Cleveland-based Safeguard Properties, charging that the firm “unlawfully dispossessed legal residents of their homes by breaking into occupied houses, locking the occupants out of their homes, removing the occupants’ personal property, and shutting off the utilities in the home, often in the face of clear evidence that the property remains legally occupied.” In stating that her office had received over 400 complaints about Safeguard Properties, Madigan’s complaint said that “Safeguard has misrepresented to homeowners and tenants that they are no longer entitled to live in their homes, when, in fact, the occupants are entitled to remain in their homes.”
In one example cited by the New York Times, homeowner Barry Tatum arrived at his house last December, only to find that both his front and back doors had been literally torn from their hinges, leaving his home and personal property exposed to the freezing temperatures. Tatum’s lender was Bank of America and Safeguard Properties was the management firm hired to “preserve” his property. Safeguard eventually replaced Mr. Tatum’s doors.
Illinois is not the only state where complaints about Safeguard have been reported; legal aid firms in California, Nevada, Florida, Michigan, North Carolina, Pennsylvania and New York echo those filed with the Illinois Attorney General’s Office. Some homeowners have filed their own lawsuits against Safeguard, accusing the company of trying to forcibly drive them out of their homes by damaging their possessions, changing locks and shutting off electricity.
Attorneys for homeowners in foreclosure, such as Adam Taub, say there is a financial incentive for property management firms to declare properties vacant because they make more money.
The core of the $26 billion National Mortgage Settlement by the attorneys general for 49 states was that the banks employed outside law firms to “robosign” foreclosures against homeowners without vetting the documentation. Under the settlment, banks are now required to police their third-party vendors and subcontractors.
Citing the 400 complaints her office has received, AG Madigan responded that the banks have “failed to supervise these firms.”
Read another article about Safeguard’s alleged business practices in the Plain Dealer.
Ripoff Report contains 38 complaints against Safeguard Properties across numerous states.