Lack Of Bankster Oversight When Contracting w/ Property M'gment Firms Problematic As Lawsuits Alleging Thug-Like Break-Ins Of Occupied Homes Pile Up

The Huffington Post reports:

• A review of court records by The Huffington Post turned up more than 50 homeowner lawsuits against banks and the two largest property management contractors in the U.S., Safeguard Properties and Lender Processing Services, stemming from break-ins of occupied homes.
  
  The allegations follow five years of generally woeful management of the foreclosure industry by all involved, as the inspector general for the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, is raising red flags about the lack of contractor oversight by the government-backed mortgage giants.
  
  A June report by the inspector general cited deficiencies "in key [foreclosed home] contractor management controls" at Fannie and Freddie, which own or guarantee more than half of all home loans in the United States. Kristine Belisle, a spokeswoman for the inspector general, said she could not comment on whether the potential misconduct described in the report includes instances of wrongful contractor break-ins.

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• It isn't clear how often contractors are breaking into lived-in homes, but consumer lawyers say these legal complaints represent just a small sample of what is happening in communities across the country, as overzealous contractors whose earnings are pegged to the amount of work they do on a home are entering occupied houses, slapping new locks on doors and sometimes walking away with family possessions.

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• Many of the problems with property inspections appear to stem from a lack of oversight and accountability. There are typically four layers of control between companies that own the loans, and the local contractors who actually do the work.

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• Typically, a bank that services or collects the payments on a home loan will send an electronic notice to an independent contractor when a borrower is in default. The contracting company, in turn, will ask a local subcontractor in its network to conduct a "drive-by inspection." Abandoned homes are then supposed to be secured against the elements, vandalism or other types of damage.

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• The decision about whether to enter a private home is up to a local contractor. That disturbs Pamela Campbell, a circuit court judge for Pinellas and Pasco counties in Florida. Campbell said banks should have to obtain a court order before one of their contractors can enter a home.
  
  "There should be due process," Campbell said. "When people borrow money to buy a house, they don't anticipate that someone may one day drive by their home and make a determination on their own about whether it is vacant or not, and then possibly change their locks and go through their stuff. That is a scary proposition to me."

For more, see Bank Contractors Break Into Occupied Homes, Terrify Residents, Lawsuits Say.