Foreclosure Clean Up: The Dark Side of This Trade – Theft of Homeowner Property, Uninsured Companies, Overzealous Lenders, Etc.

There’s a dark side to foreclosure cleaning that is starting to come to the forefront. The home foreclosure crisis has been going on since roughly the fall of 2007. And, as with any type of business, there will always be an unsavory element.

In the foreclosure cleanup business, this takes many forms, as discussed in the Detroit Free Press article, Foreclosures go wrong as lenders, cleanup crews cut legal corners.

Foreclosure Cleanup Companies Stealing Personal Property

A homeowner featured in the aforementioned article said that he had over $60,000 in personal property stolen from a home he’d managed to rescue from the brink of foreclosure.

Note: Some foreclosure cleanup companies sell the property they take from foreclosed homes. One could surmise that there’s an inbuilt incentive for disreputable firms. Hence, be sure to deal with a reputable foreclosure cleaning business — ie, one that’s licensed and insured.

It was a home that never should have been trashed out in the beginning, as the homeowner featured borrowed the money from a family member and paid off the loan in cash.

So what exactly happened? The article states:

His home had been trashed out . . . by an unlicensed crew sent there by his lender, who had been told by the law firm that handled the pre-foreclosure paperwork that the house had not been redeemed and had been foreclosed upon.

The homeowner is suing – the lender, several trashout companies and the debt collecting law firm that was assigned to collect from him.

Overzealous Lenders & Debt Collection Firms to Blame for a Lot of This Dark Side of the Foreclosure Cleaning Business

This homeowner’s property was wrongly taken because of an error made by the debt collection law firm (presumably acting on behalf of the lender).

As there are so many foreclosures nowadays, lenders are overwhelmed to the point where one hand doesn’t know what the other is doing, as was discussed here in the article on how Chase bank has been mishandling its foreclosed properties.

Read more about his this suit by this homeowner is seeking to become a class-action suit [foreclosure cleanup class action suit coming?], which means that the lawyers can sue on behalf of many plaintiffs at once. Many who deal with foreclosures say this is a necessary measure, as it’s more common than many think.

As one lawyer in the article put it:

It’s [foreclosed properties being mishandled] like the Wild West out there.

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Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.