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Home break-ins: Bank contractors accused of cleaning out wrong homes

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Just weeks ago, Nikki Bailey pulled into her driveway, walked up to her house ... and got the shock of her life.

Strange men had broken in and taken her belongings. "I look, and there's my bedroom furniture in the back of the truck," she said. "And I go, 'Excuse me, what's going on here?' They tell me my house is being foreclosed upon."

The men said Bailey was late on her mortgage payments: They were there to repo her house and had already thrown most of her stuff in the trash, destroying it. "I had a love seat, a computer desk, and a large sofa," she said.

Here's the problem: Bailey's house is fully paid off. Those men were at the wrong address.

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Imagine coming home and finding everything you have is gone. It's the hidden dark side of the foreclosure crisis: If you fall behind in your mortgage and you go into foreclosure, banks will often hire contractors to go to your house and take it over, sometimes breaking in and chucking everything.

But a TODAY investigation found they've made big mistakes, sometimes going to the wrong addresses, victimizing innocent homeowners. "I think it is awful that these companies can just go in and take your stuff," Bailey said.

Deep in the mountains of West Virginia, at the end of a dirt road, TODAY tracked down the contractor that seized Bailey's home. "How do mistakes like this happen?" we asked. "Shouldn't you double- and triple-check addresses?"

The contractor didn't want to talk, but TODAY's investigation found that he was working with Safeguard Properties, one of the biggest companies in the industry. Banks hire them to go to foreclosed homes to inspect them and clean them out. But according to The Huffington Post, homeowners in 31 states have sued Safeguard, accusing the company of unlawful break-ins.

(Read more: Top amenities for wealthy homeowners: Tech, open plans)

Illinois Attorney General Lisa Madigan is also suing Safeguard, after getting hundreds of consumer complaints. "They have a profit incentive to break into people's homes, to take their possessions, to lock them out," she said. "Every single thing they do, they get to charge more money for."

In a statement, Safeguard told TODAY it will "vigorously" fight the attorney general's suit, that it works to "preserve properties" and follows "a rigorous procedure of checks and balances" and quickly tries to "resolve" mistakes. The company won't comment on specific cases like Nikki Bailey's.

"I hope it never happens to anybody again, that these companies make sure that they've got the correct address before they start destroying somebody's life," Bailey said.

Nikki Bailey's case is an extreme example, but Madigan says she's received hundreds of complaints from homeowners accusing companies of unlawful break-ins. She says there needs to be more oversight from the banks and the government. Right now, in many cases victims are basically helpless: You have to take these companies to court to get paid back. If the problem happens to you, you should file a complaint with your state's attorney general.

Full statement to TODAY from Safeguard Properties:

"Respecting the privacy and dignity of the parties involved, Safeguard does not publicly discuss matters regarding the properties in our care.

Safeguard vendors undergo thorough training and credentialing and are required to follow careful policies and procedures in conducting services on behalf of Safeguard and its clients. We monitor their performance and take corrective action if we find that policies have been violated.

Safeguard adheres to the highest quality standards and follows industry best practices. We take reports of damage or error seriously. Not only do we work quickly to correct and resolve issues, we fully investigate the matter to identify and address the root cause."

By Jeff Rossen and Avni Patel, TODAY.com

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