i got my license this year. i have listed one reo and am in the process of listing a pre forclosure. well, the lender through several emails told me to secure the property and winterize it. which i had contractors do. while they were there they called and suggested a trash out. so i give them the go ahead. that was about two months ago. now the home owner calls me and threatens me with a law suit and wants his things back. and keys to the house. i called the lender and they said to return his things and give him the keys. i asked them why did you have me rekey the house if you are letting him have access to it. they didnot have an answer. so in two days i am meeting him at his house with his keys and everything they removed. it soiunds like they have most of it. what kind of trouble am i in?? i didnt know i was doing anything wrong. the lender told me when this gets through their foreclosure department i will get the listing and to sit tight and wait. need some help here. thanks

I just started doing REO's myself so don't have much advice for you.

Hopefully, you kept those emails from the lender?

One thing I always tell my realtors is your "only" the realtor. Any contracting of any sort, home inspections, etc. should be left to the home owner or buyer. It sounds like the owner managed to save themselves so to speak and it never went through the foreclosure process. Hopefully the lender steps up to the plate and works with you on this. If the bill/invoice is in your name, your responsible for it, at least from the vendors and home owners point of view.

the lender has been slow to get back with me. one of the last emails said " the property is secured and winterized right?" . At that point it was not and that was on a friday. so i panicked and called up my guys and said rekey and winterized asap. so on saturday and sunday they went to the house and did the work, while they were working they did the trash out after talking with me. on saturday i replied letting the lender know that it was secured and wineterized and the trash out was taking place. at this point i had no phone number to call just email. well, on monday they email me back saying just to rekey and winterized do not do a trash out. it was too late and already done. now all this is going on. and now the lender basically said no one told you to do the trash out why did you do it. i have not heard back from the home owner yet. i hope tommorrow we can meet and give him his keys and things and everything isfine. i dont want to face any legal action, suspension or fines.

when they asked if it was secured, they assumed i already did it. but no one acutally authorized me to do it. so i went ahead and had all that done thinking that was what they wanted.

himey1 -

You really stepped in it on this one. I hope your E&O is paid up. Did your butt hole pucker up a bit? Lets hope the homeowner doesn't say he had a 52 inch plasma TV with $15,000 surround sound entertainment system and fine Corinthian leather sofas that were never returned. That's your potential liability exposure. It will most likely work out OK though. This is why we have E&O. If you don't know what that is or don't have any then you may be in trouble.

I do a lot of foreclosures and sympathize with your situation. I don't think foreclosures are the place to cut your teeth in real estate. For future reference don't ever perform any services unless you have written instructions from your asset manager. Good luck.

i have e and o insurance through my broker so i am covered there. my broker said the same thing, that this guy could say he had alot more than what he did. he sounded reasonable on the phone but you never know. he is going through bankrulptcy and when i called the courthouse for the house information they said he had about 5 or 6 houses going into foreclosure. i was not there when they did the trash out but he was and watched them load up things from the garage and leave.he never said anything to them. all he said was that him and his mother were going to buy it back from the bank. they never removed anything from the house just the garage. also his water has been shut off for a few months now. so when they were there to do the winterization the water company showed up and removed his meter from the house. they said he had some kind of a home made tool to turn the water on. the power has been disconnected for a while too. he doesn'tlive there but apperantly goes there sometimes. what about fines and or license suspension? if something like that happens it will be the end of my brief real esate career.

himey1 -

Did you take pics of the interior prior to the trashout? If so it may help to protect yourself in the unlikely event he pushes the issue. Put your fines and or license suspension concerns on the back burner and don't worry about them unless they become an issue.

yes i have plenty of before pics for the bpo. the courthouse also said he totally trashed ouit on of his houises prior to foreclosure. his own bankruptcy attorney (appointed) called him a snake and can't stand this guy. he has a prison record for selling grain that did not belong to him. this guy has no credibility but i am sure he could be trouble if he wanted to.

I don't know what your state laws are in regards to the foreclosure process. But, you should be able to track the status of a property through court and tax records.

None of that stuff should have been done until the bank has the deed in their name, the redemption period is over, and there is proof of confirmation of sale. Before that, the owner still owns the home.

That is what i have found out the hard way. they instructed me by email to rekey the property and winterize it. i didn't question it, just had it done. big mistake on my part. I hope after today when his "stuff" is returned everything is okay. i asked the lender why they had me rekey it and then 2 months later tell me to give the keys to the homeowner and he has full access to the property. they said i did the right thing. they said all they were concerned about was protecting there collatoral/property. they said the deed was in there loss mitigation department. the only thing they did not want me to do was the trash out. from what your telling me i should not have done anything at all. shouldn't the lender have known this? When they told me to rekey it i assumed it was time to move forward with everything.

I think the lesson to be taken from this is to document, document, document.

If you take some action relating to a property, you should have some piece of paper that authorizes you to do it.

I have even learned to have my clients sign "Advisory Disclosures". Whenever I give my clients advice on something I will summarize it on this and ask them to sign it so that they cannot come back later and say I did not tell them they should get that roof inspection, etc.

R

You learned the hard way never to do something that the lender didn't authorize you to do (the trash out in this case). As far as having the house rekeyed before the foreclosure was complete, most mortgages have wording that if the owner has abandoned the property, the lender has the right to enter the property, secure it and preserve the property (I know my mortgage says that).

Lots of times properties get abondoned, and then get vandalized, or whatever. That's when the banks get concerned about the property. But there was stuff still in the home, so it doesn't sound like the guy just gave it up.

Also, lots of times, in REO situations, due to the several different people that are involved, often, the right hand has no clue what the left hand is doing. There's foreclosure attorneys, eviction people, the bank/lender itself, the AM, who most likely is from a different company than the the bank, all the AM's people, and the listing agent. All of whom are usually located in several different states, whose laws vary.

okay, here is another piece of the puzzle. my guys are on there way to the house to give back this stuff and keys. on there way they get called from an attorney. he is working for several banks and creditors who the home owner is filing bankruptcy against. they tell my guys not to give him anything and they want the keys to the house. so now they are on hold.

That is a rough start for getting into the business (and REO properties are not the ideal starting point). Sounds like you are understanding the issues with 20-20 hindsight but I can be very sure you will never forget the lessons learned the hard way!

I can offer sympathy but no real suggestions as you are dealing with what you have already done!

i spoke with the court appointed trustee working for all the creditors. he emailed me and said he wants everything to auction off. he also said that he would have already auctioned off the house but it is worth 100K and has 95K mortgage against it, that is why it went back to the bank. so per his instructions he and an auctioneer are going to meet my contractors and another realtor from our office at a storage building and pick up the home owners things along with the keys. he is going to give us all the documentation we need to do this. after they are done with what they want they are going to return the keys to the homeowner. at that point they dont really care what happens to the house. so that is where we stand for now. i will be glad when this is all over. one thing is, i dont think realtors should be involved with pre foreclosures only after it is a reo.

I do pre-foreclosures all of the time and love it.In ga there is no right of redemption once it is sold at the courthouse steps it is gone for good.It sounds like the lender didn't know what the laws in your state were and was depending on you to know that for them.You being new didn't know any better.If you have a question in the future it is better to ask your prinicpal broker and get an answer than to not say anything and make a mistake.As far as the e&o policy covering you that is not always true it depends on what the principal brokers e&o policy says on the rider of what is covered and what is not.

The bank just holds paper and does not own the home until they have foreclosed on it and have the deed.Some states have right of redemtion,some allow for defeciency judgements,and some use a judicial,non-judical process or both.You really need to brush up on the laws of your state if you want to work this area.

good luck

i talked to the attorney again today. he actually has legal rights to everything this guy owned including the house. he is talking to the lender saturday and are going to email me with instructions to turn everything over to him. it is only 1 pick up truck load worth about 300.00. the lender emailed me a while back and said the foreclosure was complete and when they record the deed i would get the listing. when i seen that along with them wanting it rekeyed and winterized i thought it was ready to go. the home owner is on his way to prison for harvesting abouit 200 acres of corn and selling it that did not belong to him. and he has several houses all goinhg to foreclosure and he is filing bankruptcy. and now this trustee wants every little dime he can get ouit of all this.

Saturday the keys and junk were turned over to the bank trustee. he faxed us all the documentation stating they was the legal owner of it all. now this is a different bank than the lender i was dealing with for the house. monday i am calling the mortgage lender and let them know what is going on. my broker feels this was the best solution. should the lender know about this situation? once again the only reason the lender is involved is because the trustee said there was not enough equity in the home for him to deal with, otherwis he would have already auctioned off the home. i hope this is the end of this.