Document Type
Article
Publication Date
8-2015
Journal Title
University of Cincinnati Law Review
ISSN
0009-6881
Abstract
During the housing crisis banks were confronted with a previously unknown number mortgage foreclosures, and even as the height of the crisis has passed lenders are still dealing with a tremendous backlog. Overtime lenders have increasingly engaged third party contractors to assist them in managing these assets. These property management companies — with supposed expertise in the management and preservation of real estate — have taken charge of a large swathe of distressed properties in order to ensure that, during the post-default and pre-foreclosure phases, the property is being adequately preserved and maintained. But in mid-2013 a flurry of articles began cropping up in newspapers and media outlets across the country recounting stories of people who had fallen behind on their mortgage payments returning home one day to find that all of their belongings had been taken and their homes heavily damaged. These homeowners soon discovered that it was not a random thief that was the culprit, but rather property management contractors hired by the homeowners’ mortgage servicer.
The issues arising from these practices have become so pervasive that lawsuits have been filed in over 30 states, and legal aid organizations in California, Florida, Michigan, Nevada, and New York report that complaints against lender-engaged property managements firms number among their top grievances. This Article analyzes lender-engaged property management firms and these break-in foreclosure activities. In doing so, the paper makes a three-part call to action, which includes the implementation of bank contractor oversight regulations, the creation of a private cause of action for aggrieved homeowners, and the curtailment of property preservation clauses in mortgage contracts.
First Page
1155
Last Page
1214
Num Pages
60
Volume Number
83
Issue Number
4
Publisher
University of Cincinnati College of Law
Recommended Citation
Christopher K. Odinet,
Banks, Break-Ins, and Bad Actors in Mortgage Foreclosure,
83
U. Cin. L. Rev.
1155
(2015).
Available at:
https://scholarship.law.tamu.edu/facscholar/2017
File Type
Included in
Banking and Finance Law Commons, Contracts Commons, Housing Law Commons, Property Law and Real Estate Commons