Nationwide property management firm Safeguard Properties will pay $1 million to settle allegations brought by the Illinois Attorney General's office that the firm's contractors illegally locked residents out of their homes before their foreclosures were finalized.
Nearly all of the settlement money is to be paid to Illinois residents who filed complaints over the incidents, a news release from state Attorney General Lisa Madigan's office states.
In addition to the fine, Safeguard must follow 40 operating standards in conducting inspections and other services, as set by Madigan's office, to ensure homeowners' rights are protected.
In her suit filed in September 2013, Madigan alleged that Safeguard contactors wrongly deemed homes vacant, resulting in homeowners' utilities being shut off prematurely. Contractors also changed door locks and illegally removed residents' personal belongings, even though foreclosure proceedings had not been competed and the residents were still living in the premises, Madigan's office says in its release.
As per the settlement, Safeguard has agreed to adhere to certain standards when securing properties and determing whether they are vacant. This includes requiring inspectors to support their inspections with photographs and an affidavit, as well as posting notice to the occupant that the property has been deemed vacant before any contractors enter the building.
In addition, the company must increase its oversight and quality control of its subcontractors and must maintain a 24-hour hotline for fielding consumer complaints.
‘The property preservation industry plays an important role in protecting and preserving vacant and abandoned properties on behalf of the mortgage industry,’ Safeguard officials responded in a statement. ‘Safeguard has a proud history of partnering with our clients, municipalities and communities so that these properties do not negatively impact surrounding property values, raise safety concerns or contribute to blight in communities.
‘From the beginning, we have respectfully disagreed with the allegations made by the Illinois Attorney General and the settlement does not include any findings of liability or wrongdoing by Safeguard or any of its contractors,’ the company adds in its statement. ‘We are happy that we had the opportunity to educate the Attorney General's office as to investor requirements and the risks inherent in determining vacancy within the preservation industry. The consent decree memorializes those procedures that were materially already in place at Safeguard prior to the filing of the lawsuit and will allow us to ensure a laser focus on quality frameworks to minimize risks in the field.
‘Safeguard has a proven history of supporting the communities in which we serve,’ the statement continues. ‘The settlement agreement is an extension of the community and consumer focus that has always been a benchmark of our service delivery model. We feel that the monetary settlement will continue to support those communities and consumers in the state of Illinois as we have always done since our founding 25 years ago.
‘We are pleased to have come to an amicable resolution and look forward to putting this matter behind us,’ the statement concludes.