Court Says Mortgage Company's Practice Of Changing Locks On Delinquent Homeowners Is Illegal
A mortgage company’s practice of locking people out of their homes before the owners have been foreclosed on is illegal. The Washington Supreme Court says it’s a violation of Washington’s Consumer Protection Act. According to court records, one woman in Wenatchee came home from work to find she couldn’t get into her own home. Nationstar Mortgage had come by and changed the locks. This, despite the fact she’d received no notice of the pending lock change.
Sheila O’Sullivan is with the Northwest Consumer Law Center, which filed a friend-of-the-court brief in the case. She says some 3,600 homeowners in Washington had similar experiences with Nationstar. In some cases, she says there wasn’t even a foreclosure pending.
“One gentleman was locked out three separate times. And, eventually, they ended up removing all his belongings from the house and leaving them in the yard and they were all destroyed,” O’Sullivan said.
How, you may wonder, could this happen?
It has to do with the “deed of trust” used to secure certain mortgages. O’Sullivan says, if you read the fine print, you see that the lender may come in to "preserve the property if it’s been abandoned."
“And, so it’s been a regular practice oftentimes whether it’s abandoned on not,” she said.
Lenders say they need to be able to secure property they have an interest in.
But, in its ruling, the Washington Supreme Court determined Washington’s consumer protection law clearly prohibits a lender from taking possession of a property prior to foreclosure and the court says changing the locks does amount to “taking possession.”
The case against Nationstar Mortgage isn’t over. A federal class-action suit is continuing in federal court in Eastern Washington.