The most distressing content most of us have ever seen on Facebook falls within the realm of the overshare: your boss’s Vegas stag party pics, or your new boyfriend’s status change from single to “it’s complicated.” But there’s a trend toward much more distressing messages being delivered via the social network: foreclosure notices.
The phenomenon started in 2008, when an Australian court allowed — no, ordered — a lender who was attempting to foreclose on a home to serve notice on the defaulting borrowers via Facebook, as well as at their Canberra home and a backup physical address. Since then, attorneys in New Zealand, Canada, and, this spring, East Sussex, England, have all authorized mortgage lenders and their attorneys to serve borrowers with foreclosure notices via Facebook, when the borrowers could not otherwise be located.
Facebook, which has of course been criticized by consumer advocates over the privacy of users’ personal data, seems to view these cases as a sort of official endorsement: After the 2008 case, the Associated Press quoted Facebook spokesman Barry Schnitt saying the company was “pleased to see the Australian court validate Facebook as a reliable, secure and private medium for communication.” Notably, the Australian court emphasized the fact that the borrowers had not activated any privacy protections on their account in authorizing the foreclosure notices to be served through the social network.
Both the English and Australian instances of foreclosure via Facebook seem to have accurately hit their targets: Both borrowers reacted to the service almost immediately. Attorney Archie Tsirimokos, whose firm represented the lender in the Australian case, told Bloomberg that the borrowers tightened their privacy settings within a day of receiving the notice via Facebook, giving lawyers the proof the court required to allow them to repossess and sell the property. And in the British case, the attorney who served the foreclosure notice via a Facebook direct message reported that it took “a matter of minutes for the debtor to respond to the e-mail,” allowing the foreclosure case to proceed.
But will this trend jump the pond?
Well, in America, foreclosure notices are generally public record, even when served via traditional means, so privacy concerns are moot. Debt collectors of all sorts are already using debtors’ Facebook wall declarations to track them down, and attorneys are already using them as evidence in lawsuits (81 percent of divorce lawyers surveyed last year said they have used or faced evidence from Facebook, Twitter, YouTube and other social networks in a divorce case).
Electronic service is typically permitted in American court cases only when the party being served has agreed to it in advance; I can imagine a world in which lenders begin to routinely request — and obtain — the borrowers’ permission to make service of foreclosure notices via email, Facebook and other electronic means at the time the original loan documents are signed.
And, unsurprisingly, some attorneys say social networks like Facebook would be a sensible tool for service of all sorts of legal notices, including foreclosure notices, including Joseph DeMarco, co-chair of the American Bar Association’s criminal justice cyber crime committee, who points out the networks’ particular utility in serving people who seem to “exist only online.”
On the other hand, the countries which have allowed foreclosure by Facebook haven’t had the issues with robo-signing — the practice, found last fall to be widespread at American banks, whereby lenders failed to even read vast number of mortgage files before foreclosing on borrowers’ homes. Nor have they seen the epidemic mishandling of loan modification applications which has plagued the American mortgage servicing industry. And foreclosure notices served at the property are typically the only way renters find out their homes are in danger of foreclosure — one argument that posting foreclosure notices on the door is a convention that should never be eliminated.
If lenders can’t keep track of a borrowers’ financials, or can’t bother to read the files before evicting homeowners, there’s an argument that service via Facebook — where it can be difficult to verify that you’re sending a high school reunion invite to the right person — is not a tenable proposition for American lenders. Many would argue that lenders should be required to jump the same hoops, dot the same i’s and cross the same t’s they are currently required to, under the individual states’ foreclosure procedural laws.
Strangely, however, the most recently publicized iteration of the robo-signing settlement currently being negotiated between the states’ attorneys general and the nation’s largest mortgage lenders would loosen, not tighten, the procedural hurdles lenders must leap before foreclosing. So it is possible that someone you know might get a really unwelcome direct message from their lender in the not so distant future.