Apparently a Bank of America contractor who mistakenly thought a house was empty when the owner was away, padlocked the home and cut off the utilities.

Angela Iannelli, who lives near Pittsburgh, says the worker also stole her pet parrot, Luke, causing her emotional distress during the week she couldn’t find him, according to the Wall Street Journal. She said she was prescribed medication for the anxiety.

Iannelli has filed a suit against the bank, which says it thought the home was vacant. Bank of America sent to contractor there even though she was not in default on her mortgage and the house was not vacant.

Iannelli’s lawsuit charges that the contractor cut water and electrical lines, damaged  flooring and furnishings, and poured antifreeze into sinks and toilets.

She says when she called the bank to complain no one would tell her where the bird was at first, but later she was told to go to the contractor’s office. The Bank has apologized to Iannelli, but she is seeking $50,000 in damages in the suit.

This is a bizarre story on several accounts. First, why was the contractor sent to the home in the first place if the homeowner wasn’t even in default on the mortgage loan? Had they called her about being late with a mortgage payment? Second, if the contractor did in actually damage her home and cut utility lines,  what was the reason for doing so?  

It’s pretty common knowledge that homes that end up in foreclosure sometimes are damaged or need a lot of repairs. The assumption is usually that any damage in foreclosed properties was inflicted by homeowners angry at being put out of their homes. It’s disturbing to think that a contractor hired by a bank to secure a property could actually be the one trashing the place.

I live in Arizona and pretty much every home within a 2 square mile radius of my home has dropped 50-60% in value since 2006.

Which means terms like loan modification, short sales and foreclosure pretty much dominate every neighborhood bar b q party at the local park.

Recently, I was at a neighborhood gathering and someone was telling their story of trying to get their loan modified but the lender wouldn’t budge, so they tried to short sell it but got denied and were about to have their house sold at auction in the near future.

I couldn’t help but wonder “I wonder if the lender really wants to foreclose” or if they just didn’t have the right help.

And I didn’t think too much more about it.

Until I saw that same person who had been told “no, no, no” again yesterday.

I was expecting him to tell me how his pending-foreclosure date was impacting his mental health but instead he had a smile on his face and opened our conversation with” you will never believe what happened – my lender approved my short sale!”

And then he told me how the lender that had told him “no, no, no” suddenly had a change of heart because his Real Estate Agent had gotten on the phone with the right person at the lender and made them understand that they had bad information and needed to re-evaluate.

Which was just a simple reminder:

When hiring people to help you with your loan modification, short sale or foreclosure – there can be a world of difference between the knowledge, skills and experience of each “expert”.

And when some just hear “no, no, no” and give up… some actually get to “yes” because they don’t give up.

And there can be a fine line between “no” and “yes” and that fine line can make all the difference.

Home builders are cutting prices on new homes to entice buyers. New construction accounted for 7.6% of home purchases last year, down from an average of about 16% over the past 20 years, according to an article in the Wall Street Journal.

Home builders have been hit hard by the recession as many people looking to buy homes have turned to foreclosures, which can be found just about anywhere in the country.

Folks looking to take advantage of the home buyer tax credit this year shouldn’t rule out new home construction. Even if you don’t qualify for the tax credit some of the deals being offered may be worth pursuing. Home builders are offering cut-rate pricing to move inventory. 

According to the Journal article, Meritage Homes in Maricopa, Ariz., is selling three-bedroom houses that start at $99,900, half the price they would have been four years ago. KB Homes is selling new homes in Las Vegas for $150,000 to $170,000, way below the $400,000 price tag the would have carried before the housing market tanked.

If you don’t want to deal with some of the surprises and headaches that can come with purchasing a foreclosed home, it may be worth your while to starting visiting communities with new homes. Who knows, maybe you’ll be able to get a few upgrades thrown into the deal if you decide to buy.