The bank changed the locks on my door, but my home is still in foreclosure. Is that legal, and what should I do?
The lock change might be legal—or it might be illegal—depending on whether your home is vacant or occupied.
If the house is vacant, the servicer (on behalf of the lender or subsequent loan owner) can take steps, like changing your door locks, to secure the property even if it's still in foreclosure. Check your mortgage or deed of trust, which probably has a clause that says the lender has the right to take reasonable or appropriate action to protect its interest in the property if you abandon the home.
What kinds of things can the servicer do to secure the property? Securing the property means doing things like:
The servicer can legally take these actions if you've abandoned the home.
Why change the locks? If you fall behind in payments, the servicer will want to find out if the property is occupied or vacant. The reason the servicer wants this information is that abandoned homes are more likely to be vandalized or suffer other forms of damage. Because the home acts as collateral for the loan, the servicer wants to prevent anything that might negatively affect the property's value.
And, because the servicer is responsible for making sure the property is secure, it will typically hire a property management firm, called a 'field service company," which in turn may hire a subcontractor to find out if the property is vacant and perform any actions needed to secure the property. Changing the locks is a typical step when securing a vacant property.
If you're still living in the home, however, the bank can't change the locks until after it gets ownership of the property through the foreclosure process. Even then, it will need to take proper steps to evict you if you haven't already left.
Keep in mind that, even during a foreclosure, you're still responsible for the upkeep of the home. Sometimes, occupied homes are mistakenly categorized as unoccupied if the inspection reveals some evidence that you're no longer living in the property. For example, if the home is falling into disrepair or the lawn is severely overgrown, this might indicate that you've permanently left the home—even if you're still living there.
If you maintain the property during the foreclosure process, there's less chance that your home will be incorrectly deemed unoccupied.
Unfortunately, some companies mistakenly categorize a home as vacant. Certain field services companies have been accused of repeatedly:
Various factors can contribute to a home being miscategorized as vacant. Generally, the determination is made quickly, perhaps after just one brief cursory visit to the property. Companies have incorrectly decided that a home was vacant even when evidence to the contrary existed, like a barking dog inside the house, a car in the driveway, garbage cans placed outside for pickup, or a neighbor's statement that the property is occupied.
Or, a company might have a financial incentive to deem a property vacant because the company makes more money. The company might charge $100 to board up the doorway or $60 to change the locks, for example.
One New York judge has suggested that homeowners who are wrongfully locked out of their own homes should cut off the padlock. The judge, Housing Court Judge Patrick M. Carney, noted that people should leave their house only when they are legally required to do so.
If you come home to find the locks changed or the door padlocked, you should certainly call your loan servicer and let them know that you've been illegally locked out of your home. To figure out who your loan servicer is, look at your monthly mortgage payment coupon. You should also call the field service company (if you can find out which company did the lockout), though they'll likely refer you back to the servicer. You might also want to speak to a qualified attorney who can advise you on what to do in your particular circumstances.