Sunday, September 23, 2012

Foreclosed Homeowners Get Premature Boot As Auction Buyers/Investors Rush To Take Possession Of Premises Before Sales Becomes Final; Cops, DA Fiddle In Bringing Criminal Charges

In El Paso, Colorado, The Colorado Springs Business Journal reports:
  • As real estate investment heats up and the El Paso County Public Trustee’s foreclosure auctions overflow with anxious bidders, ethics have become a bigger issue.

    Those closest to the action say there are regular stories of investors breaking into houses to check them out before the sale, trashing houses after lien holders redeem them, banks sending eviction notices on properties they don’t own yet, and investors going into homes to start remodeling them before they have the title.

    That last scenario is actually getting out of hand, said Public Trustee Tom Mowle. “We’ve had a rash lately of what I would characterize as burglaries,” Mowle said. “We’ve had a couple cases lately where people have bought property at sale and immediately go to the house, lock people out and take their stuff.”

    Whoever buys a property at the foreclosure auction — an investor or the bank — has to wait eight business days before taking possession of the property. That period allows the bank to discover mistakes and lien holders an opportunity to buy the property even if it already has been sold to an investor.
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  • An El Paso County sheriff’s deputy responded to a burglary call on Sept. 4. Lydia Graham, referred to as Lydia Upchurch in the deputy’s report, said she felt an investor had burglarized her home.

    Graham told the CSBJ that she saw a dumpster in front of her property [...] on Monday, Sept. 3, which was a holiday and was only seven business days after her home sold at the El Paso County Public Trustee’s foreclosure auction on Aug. 22. She said there were cabinetry and personal items in the dumpster.

    I was hot,” she said. “I was livid. They went in there without permission and were throwing my things in the trash.” Graham said she hadn’t received any notice that the property had finally sold at auction. She said she had furniture, cutlery, clothes, tile, paint and other home improvement supplies along with a motorcycle stored in the house. “They didn’t have any right to move stuff,” Graham said.

    Graham told deputies that the investor, Nikolas Fedorczuk, had called her and told her she could come get her things, but she had to get them before Sept. 4 or he would take possession of them.

    Mowle learned of the case Sept. 4 and said it was an upsetting example of recent behavior.
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  • Civil or criminal?

    The county deputy who handled the case consulted with the 4th Judicial District Attorney’s office and determined that Fedorczuk had no criminal intent when he went into the house, so they would not file criminal charges. That sets a dangerous precedent, Mowle says.

    In my opinion this is a property crime,” he said. “There’s absolutely no right for anyone to do anything other than secure against theft and damage.” That means fixing broken windows and leaky roofs and locking the doors, he said. It doesn’t mean moving motorcycles into storage facilities or tearing out carpets.

    How is it a civil matter when you’re destroying someone else’s property?” Mowle said. He’s heard enough stories of this kind of thing and he’s sure it happens even more often than he realizes.

    If a property is vacant, I think a majority of investors are going to bet the owner isn’t coming back,” he said. “And unless they contact me, I wouldn’t know about it.”

    While the DA’s office might have advised the sheriff’s office that Graham’s particular case is a civil matter, Robin Cafasso, chief deputy district attorney, said not all cases like this will be civil. “We do not have a policy that all cases like this are civil,” Cafasso said. “On the contrary, we would urge law enforcement to investigate it as a burglary.”

    In most cases, she said this type of thing probably should be handled as a criminal matter. “How did they get in? If they broke a lock, there’s property damage,” she said. “If they’re taking things out of the home, there’s theft.” She said ignorance of the law is no excuse.

    Anyone buying property in a foreclosure process should know the law,” she said. “There is just no way that someone holding a certificate of purchase holds the right of possession.”