In a ruling this month, the Washington Supreme Court found Nationstar’s actions to enter a property changing the locks to secure it after being deemed empty and abandoned illegal – a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payments.
The mortgage industry is currently coping with the significance of this ruling, which found that provisions standard in mortgage documents which allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned conflict with state law.
The court held that they violate state law, which prohibits lenders from taking possession of property before foreclosure. This could equally apply to any state as the reasoning was that until the bank takes formal possession via the foreclosure process, that the bank was committing a trespass and theft.
Counsel for the homeowners is planning to seek damages that include the fair rental value of the class members’ properties between the time the locks were changed and the time the foreclosures were eventually completed — a period that typically spanned eight to 10 months, meaning damages could easily reach into the tens of millions of dollars
Washington appears to be the first state in the nation that has invalidated the provisions, the plaintiffs’ lawyers say, and consumer advocates say other states could follow suit or that the ruling could inspire additional class-action lawsuits.
If you have had your foreclosing bank change the locks and lock you out of the home you were living in at the time, contact u today for a consultation to see if a similar case can be filed on your behalf.