Former owners of homes lost to real estate foreclosures have complained that lenders and banks are quick to take over their properties and change the locks even when homeowners still have some weeks to clear their properties. They have also complained that lenders are locking them out of their homes when personal belongings are yet to be sorted from their houses.
However, real estate market experts have stated that, although the changing of the locks in these homes is done fairly quickly, lenders are not violating any law in terms of securing the residential properties. They added that there is a gray area when it comes to the waiting period that allows winning bidders to take possession of the foreclosed dwelling auctioned off by the lender.
Some states require auction winners to provide former owners with at least ten days prior to taking the title of the foreclosed house issued by real estate title companies. This requirement is meant to provide ample time to address possible problems like auction objections or fresh court filings. This waiting period starts once the court clerk has issued a sale certificate which is often done right after the auction.
Despite the fact that the waiting period is not yet over, some winning bidders, lenders and banks change the locks of houses under real estate foreclosures. This is done to make sure the property is protected from theft, vandalism and unauthorized entries. Lender banks usually hire real estate agents to look in on the property within 24 hours of it being auctioned off to see if there is anyone still occupying it.
Real estate agents reveal that it is standard procedure for them to knock on the door, check the windows and ask neighbors and electric power providers whether the house is still occupied and then secure it if it happened to be vacant. They added that the decision on whether to change the property's locks or not within the wait period is left to the real property agent.
However, they did admit that there are instances when agents get it wrong and order locks to be changed in residential real estate foreclosures that are still occupied by former owners. They stated that if such is the case, they do the best they can to make it up to the former owner.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.