Laura Jordan came home from work one day to find herself locked out. She had missed two mortgage payments, and the company servicing her loan had changed the locks without warning.
In a ruling this month, the Washington Supreme Court found that action illegal — a decision that clears the way for a federal class-action case that Jordan brought on behalf of at least 3,600 borrowers in the state, and one that could have broad ramifications on how some lenders respond when homeowners miss payments.
“This is criminal trespass and theft, and it should be treated as such,” said Sheila O’Sullivan, executive director of the Northwest Consumer Law Center. “There’s no basis for them to walk in and change the locks on a person’s home until they have foreclosed. It’s an important ruling.”
The mortgage industry is wrestling with the significance of the 6-3 ruling, which found that provisions standard in mortgage documents around the country conflict with state law. The provisions allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned.