Lisa Madigan Files Suit Against Safeguard Properties, LLC

Illinois Attorney General Lisa Madigan announced on Tuesday that she has filed a lawsuit against Safeguard Properties, LLC, alleging illegal eviction practices.

This comes as no surprise to me--our firm represents clients that have been the victims of illegal lockouts. In general, this happens because there are very few checks and balances in place in the "property preservation" industry. Safeguard is one of the biggest companies providing "property preservation" services in the U.S.

Safeguard hires regional contractors, who then hire local contractors to carry out property preservation tasks such as winterizing empty homes and securing empty properties. The problems arise at several points in the chain.

At the highest level, the bank that is hiring Safeguard should have a system in place to prevent erroneous requests for preservation services. It's one thing to ask that Safeguard verify if a property is abandoned; it's another to ask Safeguard to rekey a property before the bank is granted possession of that property.

In Illinois, homeowners in foreclosure have an absolute right to the possession of their homes until either a) the court names the bank as the "mortgagee in possession of the property or b) the court confirms the judicial sale of the home and the bank's order of possession takes effect. Here's a tip: in residential mortgage foreclosure cases in Illinois, a) almost never happens. The "mortgagee in possession" provisions of the Illinois Mortgage Foreclosure Law (IMFL) are almost exclusively applied to commercial properties or residential investment properties.

At the lowest level, the people that work for property preservation companies have varying levels of training. They likely have no idea what is happening in the foreclosure case, nor do they know the ins-and-outs of the IMFL. Their main concern is doing the job that they are paid to do. Unfortunately, some of these people also steal personal property and otherwise invade the privacy of homeowners. More often than not, these individuals also give homeowners incorrect information regarding their rights to remain in their homes.

Attorney General Madigan's complaint goes into great detail regarding the working of Safeguard. She alleges that Safeguard and its subcontractors engage in unfair and deceptive business practices that harm the citizens of the State of Illinois.

I will continue to monitor this case and update the blog as the case develops.

Stay tuned for a follow-up post that breaks down the specific examples cited by AG Madigan in her complaint. Some of the stories will likely surprise you.

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