Preforeclosure property preservation rights?

[Bob Malecki]

We just purchased 2 notes on homes in Oklahoma, both are vacant and we are working with a law firm to foreclose. Since these are boarded with FCI, we have automatic basic insurance under their blanket policy with OSC. I would like to send out a third party field service visit to get me an assessment of the property condition, and if possible secure the home if needed, especially in light of the recent tornados in the area. 

So, with these being vacant and my company is now the recorded lender, how far can I take a preservation service without violating any regulations? Any comments are appreciated. 

Bob

[Mike Hartzog]

Hi Bob,

You may find this article helpful.  There may be some specific language around this in the Deed of Trust.  The rule of thumb I use is that if vacancy status can be established, we as lenders we have the right to protect our vested interest by taking actions to secure and preserve the collateral.  So, the property can be rekeyed and boarded, the grounds maintained, property winterized, repairs required to properly weatherproof can also be done, etc.  IMO opinion this would extend to resolving code violations as well, as these if left unaddressed could get the property condemned and demolished by the governing municipality.  I think any repairs or improvements which cannot be construed as collateral preservation should be avoided, i.e., kitchen remodels probably don't qualify  :-)   Hope that helps.