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Illinois AG Reaches $1 Million Settlement with Property Services Company Requiring 40 New Operating Standards

OAG_SealA prominent property services company recently reached a $1 million settlement with the Illinois Attorney General, resolving allegations that the property services company supposedly wrongfully “locked Illinois residents out of their homes before a foreclosure was finalized,” and requiring the company to submit to 40 new operating standards with monitoring as to compliance.

A copy of the Illinois Attorney General’s press release is available here.

The Illinois Attorney General stated that the company was “hired by mortgage lenders to determine whether homeowners in default or facing foreclosure are living in their homes. If a property is deemed vacant, [the company] is responsible for securing and maintaining the property to ensure it does not lose value after it is foreclosed.”

The Attorney General alleged that the company “wrongly deemed homes vacant, instructing its contractors to shut off utilities, change the properties’ locks and illegally remove residents’ personal belongings even though they actively remained in their homes.”

In addition to the $1 million payment, the company “must also follow 40 operating standards in conducting inspections and other services relating to Illinois properties” set by the Illinois Attorney General’s office, and submit to monitoring by the Illinois Attorney General as to its compliance with these standards.

According to the Illinois Attorney General, these operating standards include:

  • “Inspectors must support their inspections with photographs and an affidavit;”
  • The company “must post notice to the occupant that it has determined the property to be vacant before it enters the property;”
  • The company “is prohibited from misrepresenting the rights of occupants that are allowed to remain in their home even though they might be behind on their mortgage and in foreclosure;”
  • “The company must increase its oversight and quality control of its subcontractors;”
  • The company “must maintain a 24-hour hotline for fielding consumer complaints;” and
  • “The company is prohibited from removing non-perishable and non-hazardous personal property prior to foreclosure unless it has a court order, and if [the company] makes a mistake, it must restore a consumer’s possession of the home, restore utility service, and return or reimburse any personal property that has been removed.”

According to the Illinois Attorney General, the $1 million in settlement funds will be distributed by the Illinois Attorney General’s office to consumers who filed complaints regarding the company’s practice.

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Patrick Kane practices in Maurice Wutscher’s commercial litigation, consumer credit litigation, insurance recovery and advisory, intellectual property litigation, and equine law practice groups. Patrick has substantial experience in a variety of civil matters including business litigation, insurance recovery, foreclosure litigation, wrongful death, product liability, general tort litigation and general liability defense. Among other achievements, he has served as first chair in a five-day jury trial and as second chair during a weeklong arbitration. In 2012, the San Diego Daily Transcript named him a “Young Attorney of the Year.” Patrick's equine practice focuses on the representation of industry participants at administrative hearing and appeals, purchase and sale agreements, partnership and limited liability creation, gaming law, regulatory matters, and equine related negligence actions. In 2015, he was appointed to serve the California Horse Racing Board as a hearing officer. Patrick graduated from the University of San Diego School of Law. He obtained his undergraduate degree from the University of Arizona where he majored in Animal Science and was a graduate of the Race Track Industry Program; there he received the Mildred Vessels Scholarship Award and the Race Track Industry Program’s Scholarship Award.

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