Illinois Attorney General Lisa Madigan said her office has filed suit against Safeguard Properties, a national property preservation provider, over what the AG's office characterized as "illegal eviction practices."

In a statement, Madigan's office alleged that Safeguard contractors "illegally evicted struggling Illinois homeowners" by breaking into their homes, changing locks to bar residents from re-entry, and shutting off utilities before a foreclosure was finalized.

Madigan filed her suit in Cook County Circuit Court, where Chicago is located, on Tuesday against the Ohio-based corporation. Safeguard is one of the nation's largest privately-held property preservation and field services firm.

"This case shows the lengths that banks and their service providers will go to abuse and intimidate borrowers in foreclosure," Madigan said in a statement. “This company was illegally breaking in to people’s homes, removing all their possessions and locking them out. It is a homeowner’s worst nightmare."

Safeguard CEO Alan Jaffa says the company will aggressively defend against the suit, and suggested that the Illinois AG was targeting a broader issue affecting all property preservation firms.

"[T]his is an industry-wide issue, at the center of which is the very challenging public misunderstanding about a mortgage company's right to protect a property believed to be vacant prior to the foreclosure sale," he wrote in a company statement, sent to the firm's clients.

"In defending this lawsuit, we plan to raise awareness about both the important role of the mortgage industry to protect and preserve properties, and the challenges of doing so," Jaffa said. "We all know that the mortgage industry is 'between a rock and a hard place' when it comes to protecting and preserving vacant properties, particularly in pre-sale status."

Industry sources that spoke with HousingWire on the condition of anonymity say they aren't surprised by the lawsuit.

"We've got millions of homes stuck in the foreclosure process for years on end in the name of foreclosure prevention, and the majority of these properties are vacant," said one attorney who specializes in creditor's rights, but asked not to be named.

"If these properties sit, they deteriorate quickly to the point of massive blight. And then the cities blame [the mortgage industry] for failing to act. Or if [the industry] does act, there is a real risk that a property might not actually be vacant."

A copy of the Illinois AG's complaint is available here.