View Full Version : The 25-Year 'Foreclosure From Hell'
An interesting case study. It seems that the resident has lived rent free for about 25 years. In addition, the period of time that mortgages are in foreclosure seems to have expanded substantially.
I suspect that mortgages will, at some point, be more difficult to obtain and will require higher down payments. This may imply that the housing market will continue lower for some time.
While it is true that Ms. Campbell is not honoring the debt she incurred, I will admit a certain guilty pleasure from seeing her beat the banks at their own game.
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LINK (http://online.wsj.com/article/SB10001424052748703865004575648900250047766.html?m od=WSJ_hps_sections_news#printMode)
The 25-Year 'Foreclosure From Hell'
OKEECHOBEE COUNTY, Fla.—Patsy Campbell could tell you a thing or two about fighting foreclosure. She's been fighting hers for 25 years.
The 71-year-old retired insurance saleswoman has been living in her house, a two-story on a half acre in a tidy middle-class neighborhood here in central Florida, since 1978. The last time she made a mortgage payment was October 1985.
And yet Ms. Campbell has been able to keep her house, protected by a 105-pound pit bull named Dodger and a locked, rusty gate advising visitors to beware of the dog.
"They're not going to take this house," says Ms. Campbell. "I intend to stay in this house and maintain it as my residence until I die."
Ms. Campbell's foreclosure case has outlasted two marriages, three recessions and four presidents. She has seen seven great-grandchildren born, plum real-estate markets come and go and the ownership of her mortgage change six times. Many Florida real-estate lawyers say it is the longest-lasting foreclosure case they have ever heard of.
The story of how Ms. Campbell has managed to avoid both paying her mortgage and losing her home, which is currently assessed at more than $203,000, is a cautionary tale for lenders that cut corners and followed sloppy practices when originating, processing and servicing mortgages. Lenders are especially vulnerable in the 23 states, including Florida, that require foreclosures to be approved by a judge.
Robbi Whelan/The Wall Street Journal
Various lenders have been trying to repossess the home since 1985.
.Ms. Campbell has challenged her foreclosure on the grounds that her mortgage was improperly transferred between banks and federal agencies, that lawyers for the bank had waited too long to prosecute the case, that a Florida law shields her from all her creditors, and for dozens of other reasons. Once, she questioned whether there really was a debt at all, saying the lender improperly separated the note from the mortgage contract.
She has managed to stave off the banks partly because several courts have recognized that some of her legal arguments have some merit—however minor. Two foreclosure actions against her, for example, were thrown out because her lender sat on its hands too long after filing a case and lost its window to foreclose.
Ms. Campbell, who is handling her case these days without a lawyer, has learned how to work the ropes of the legal system so well that she has met every attempt by a lender to repossess her home with multiple appeals and counteractions, burying the plaintiffs facing her under piles of paperwork.
She offers no apologies for not paying her mortgage for 25 years, saying that when a foreclosure is in dispute, borrowers are entitled to stop making payments until the courts resolve the matter.
"This is every lender's nightmare," says Robert Summers, a Stuart, Fla., real-estate lawyer who represents Commercial Services of Perry, an Iowa-based buyer of distressed debt that currently owns Ms. Campbell's mortgage and has been trying to foreclose. "Someone defending a foreclosure action can raise defenses that are baseless, but are obstacles for the foreclosing lender," he says, calling the system "an unfair burden" for lenders.
While Ms. Campbell is an extreme case, more homeowners in trouble are starting to use similar tactics and are hiring defense lawyers to challenge their foreclosures, hoping to drag out the foreclosure process long enough to reach a settlement with the lender.
Nationwide, there were 2.1 million mortgages in some stage of foreclosure as of October, according to research firm LPS Applied Analytics. The average loan in foreclosure—the process typically starts when a loan becomes 90 days past due and a bank files a complaint—had been in default for 492 days as of October, up from 289 days at the end of 2005, according to LPS. In Florida, one of the states where foreclosures are handled by courts, the average loan in foreclosure has been delinquent 596 days.
Okeechobee County, a rural jurisdiction of 40,000 known for bass- and perch-fishing festivals, hasn't experienced a foreclosure problem as intense as in many coastal regions of the state. Ms. Campbell's house—which has vinyl siding, boards over the windows (to protect it from storm damage, she says), a crumbling backyard swimming pool and an old sedan rusting in the driveway—stands out among the manicured lawns, stucco ranch houses and cattle pastures interspersed among the houses.
In the town of Okeechobee, the county seat, signs of a local economy dependent on agriculture abound: stores selling pre-fab barns, animal feed and lumber line State Road 710 leading into town.
Brian Whitehall, Okeechobee's city administrator, says unemployment in the area is hovering around 14.5%, slightly higher than the statewide average of 12% in September. Foreclosure filings have nearly doubled each year since the state's housing market peaked in 2006, with 617 filed in 2009. But the national housing slump and the area's economic woes aren't immediately apparent in Okeechobee's quiet neighborhoods.
"We're not like the Port St. Lucies of the world, where entire subdivisions are empty and it's like a ghost town," Mr. Whitehall says.
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Court records outline the rocky road Ms. Campbell's loan has taken over the past 32 years. In 1978, Paul Campbell purchased the house on SW 19th Lane, a few minutes' drive from the small pharmacy he owned, using a $68,000 mortgage from First Federal Savings and Loan of Martin County. He married Patsy in 1980, and died later that year from emphysema, leaving the property to his wife.
In 1985, Ms. Campbell stopped making mortgage payments because of an illness that caused her to lose income and get behind on her bills, she says.
By then, the savings-and-loan crisis had begun to take hold. First Federal merged with First Fidelity Savings and Loan, which assumed ownership of the Campbell loan. In 1987, First Fidelity sold the mortgage to American Pioneer Savings Bank, an Orlando-based lender that collapsed in the early 1990s.
The loan would change hands four more times, and four different lenders would try to foreclose on her. But every lender that held her loan either merged or collapsed. Each time ownership of the lender changed, the foreclosure case against Ms. Campbell would be dropped.
The loan eventually made its way to the Resolution Trust Corp., the federally owned asset manager that liquidated assets of insolvent S&Ls, and later, to the Federal Deposit Insurance Corp.
In June 1998, the FDIC sold the mortgage to Commercial Services of Perry, which filed to foreclose in 2000. After another illness, Ms. Campbell deeded the house to her daughter, Deborah Pyper. Years later, after Ms. Campbell recovered, the house was deeded back to her. Ms. Pyper declined to comment.
Ms. Campbell's early briefs in the case were strongly worded and colorful, drafted with the help of a now-retired Okeechobee County lawyer.
The briefs presented dozens of reasons why Ms. Campbell thought the bank didn't have the right to her house: Paul Campbell's signature was forged on the original mortgage, she said, and the original sellers never received money from the bank. At other times, she said the mortgage was never properly conveyed between banks and federal agencies, and she demanded paperwork that they were unable to immediately produce.
Attorneys' fees and court costs from previous cases hadn't been paid, or the amounts were wrong, she argued. One brief said that "Defendant Campbell specifically denies the existence of any 'debt.'"
In 2007, a trial-court judge tossed out all but two of Ms. Campbell's defenses, calling the case an "unnecessary paper chase which has been an unproductive and unnecessary use of judicial resources."
Commercial Services paid a court-determined amount to settle court costs from previous cases, and moved to take the foreclosure to trial, with a date set for early October 2010.
In response, Ms. Campbell filed for bankruptcy, effectively blocking the foreclosure until a stay is lifted by a bankruptcy-court judge.
Her filing lists $225,000 in real-property assets, and lists a secured creditor's claim of $63,801, which is equal to the unpaid principal on her mortgage. In previous court arguments, she had maintained that no lender held a secured claim against her because the note was improperly assigned.
A stern, confident woman who can quote Florida civil-procedure statutes by reference number, and who adores cooking Southern food and listening to classic Grand Ole Opry-era country music, Ms. Campbell steadfastly believes she is right. Her most recent argument in the case is that under Florida homestead law, the bank can't seize her house because it is exempt from liens and forced sales.
"Commercial Services of Perry is in the business of doing this. They win some, they lose some," she says. "If they had a case, they would have already won it, years ago."
.She maintains that at this point, no one owns her mortgage note, and that because of fraud and paperwork mistakes by the banks that transferred it over and over again in the 1990s, the debt has been made void.
Mr. Summers, the lawyer for the lender, calls the case "the foreclosure from hell." He says Ms. Campbell has appealed the case seven times since he took it on in 2000, and all of her arguments are just stalling tactics.
"It's almost like clockwork. You know you're going to get another three-inch stack of documents every month or so, and you have to take the time to read through it," Mr. Summers says. "That is a burden on the courts, a burden on lawyers to decipher it, and it has enough meat in it that it's not all void."
For example, according to Mr. Summers and to court filings, in 2007, when a judge remanded the case to the trial court, a court clerk failed to issue a mandate establishing the lower court's jurisdiction. Ms. Campbell appealed the case on those grounds.
The bankruptcy should take about four months to adjudicate, Mr. Summers says, at which point he intends to take the foreclosure to trial. According to Commercial Services of Perry's latest filings, Ms. Campbell owes the $63,801 in principal plus $148,000 in interest.
"All she's got to do is pay what she owes: the principal, the interest, plus court costs and attorneys' fees," Mr. Summers says. "But she doesn't get a free ride."
1stindoor
12-06-2010, 10:26
..."All she's got to do is pay what she owes: the principal, the interest, plus court costs and attorneys' fees," Mr. Summers says. "But she doesn't get a free ride."
If she hasn't paid in over 25 years...what makes them think she'll pay now?
She has been getting a free ride...and on her neighbors back. The fact that she deeded her property to her daughter and then back again demonstrates that she knows all too well that what she's doing/done is illegal.
The question will become what judge/LEO wants to forcibly evict a widow?
GratefulCitizen
12-06-2010, 11:21
The joke is on her.
If she had sought some sort of settlement, she could have been using her talents for more profitable endeavors and would have been much richer for the same time and effort.
Her sense of satisfaction was bought at a dear price, in terms of potential earnings forgone.
She is an object lesson in the errors of zero-sum thinking.
And here's the other side -
LINK (http://www.scribd.com/doc/44863213/Maria-and-Jose-Perez-v-Bac-Home-Loans-Servicing-Lp-Rec-on-Trust-Na)
In essence - and recognizing that understanding court pleadings is not one of my skills - it seesm that Bank America tried to foreclose on a house when the debt had already been paid.
So the debtor was honorable. The creditor was not.
Excerpt:
In August 2009 Plaintiff’s paid the Morgan Loan in full with the proceeds of a refinancing loan. This payment is shown by the records of Orange County Title Company of Texas (see Business Record Affidavit attached and incorporated herein) documenting payoff of the Morgan Loanby the title company’s wire transfer of funds effected on August 5, 2009.The payoff was made to the Mortgage Servicer of the Morgan Loan, Taylor Bean & Whitaker.
BAC attempts to collect the Perez’s “Morgan Loan”
11. BAC claims to have received rights in the Morgan Loan fromTaylor Bean & Whitaker as of September 1, 2009. Notwithstanding thatby then the Morgan Loan was fully paid BAC has attempted repeatedly tocollect the paid off Morgan Loan.
6. Since September 2009 BAC has sent collection letters,dunning statements and threatening letters to Plaintiff demanding payment of the Morgan Loan. Among the letters sent to Plaintiff after the MorganLoan was paid off were two sets of notices that the Morgan Loan shortly would be transferred to HUD and that Plaintiff were going to lose their home.
All the rules have changed in the last couple of months. Lending banks are now being held accountable for the trap they set, borrowing money they didn't themselves have, while using loose and illegal practices in the process. The massive lawsuit against Wells Fargo / Wachovia, Indymac / OneWest bank, Citibank, Bank of America, JP Morgan Chase, GMAC..............can actually, not only put a stop to your foreclosure, but also pause your house payments with no loss to you............
https://sites.google.com/site/sueyourlendernow/:confused:;):D
Roguish Lawyer
01-19-2011, 16:41
All the rules have changed in the last couple of months. Lending banks are now being held accountable for the trap they set, borrowing money they didn't themselves have, while using loose and illegal practices in the process. The massive lawsuit against Wells Fargo / Wachovia, Indymac / OneWest bank, Citibank, Bank of America, JP Morgan Chase, GMAC..............can actually, not only put a stop to your foreclosure, but also pause your house payments with no loss to you............
https://sites.google.com/site/sueyourlendernow/:confused:;):D
Please read the rules and post an introduction before posting again.
......... Lending banks are now being held accountable for the trap they set, borrowing money they didn't themselves have, while using loose and illegal practices in the process............
I thought we were dealing with grown ups. I see the children are buying homes now and crying when the bill comes due.
TerryJo - comply with the board rules or your time here will be short.
I thought we were dealing with grown ups. I see the children are buying homes now and crying when the bill comes due.
You could also make the same case for the banks and the bailouts they received.
Whats a few more getting something for nothing?
GratefulCitizen
01-19-2011, 18:27
You could also make the same case for the banks and the bailouts they received.
Whats a few more getting something for nothing?
The banks were saved in order to preserve the system.
It was a choice of evils.
Doesn't have anything to do with fairness.
The banks were saved in order to preserve the system.
It was a choice of evils.
Doesn't have anything to do with fairness.
You surely mean pervert the system. Anyway you twist it, it is all to do with providing income to High Profile Scam Artists and ripping the nation and the people of their WEALTH.
I hear on here from time to time that we govern by the Rule of Law......depends on if you can Lawyer up and bend the Laws and pay off politicians to look the other way.
The day the Gubment begins holding the Too BiG too Fail Franchise and Franchisees accountable to the same LAWS they hold me accountable to....then I might start thinking differently.
I thought we were dealing with grown ups. I see the children are buying homes now and crying when the bill comes due.
I suspect that many of the buyers were so lacking in knowledge about what they were getting into that they could hardly be seen as grown ups. When unsophisticated people are told they can get something for nothing, they just might believe it.
GratefulCitizen
01-19-2011, 19:17
You surely mean pervert the system. Anyway you twist it, it is all to do with providing income to High Profile Scam Artists and ripping the nation and the people of their WEALTH.
I hear on here from time to time that we govern by the Rule of Law......depends on if you can Lawyer up and bend the Laws and pay off politicians to look the other way.
The day the Gubment begins holding the Too BiG too Fail Franchise and Franchisees accountable to the same LAWS they hold me accountable to....then I might start differently.
Never said they made the right choice.
They made the politically easy one.
Wealth and money aren't the same thing.
Scam artists depend on people not knowing the difference.
Never said they made the right choice.
They made the politically easy one.
Wealth and money aren't the same thing.
Scam artists depend on people not knowing the difference.
A failure of epic proportions and a gift that will keep on giving for the foreseeable future....so scam the scammers with the Law, steal what you can, sue the banks for the ill gotten gains, get free houses if you can.
It is all wrong, but who cares....
It is all wrong, but who cares....
Is it? Or have society's standards shifted such that the current behavior is accepted and even admired? When large corporations arrange strategic defaults and are complimented on their business acumen, will Joe Sixpack eventually accept the new model of behavior?
Is it? Or have society's standards shifted such that the current behavior is accepted and even admired? When large corporations arrange strategic defaults and are complimented on their business acumen, will Joe Sixpack eventually accept the new model of behavior?
Let me re-phrase that....The way I was brought up it is all wrong.
But these days it is accepted by many, admired by many, they consider themselves blameless and were merely 'doing their jobs'. We know 60% of the people that sign are going to fail and I knew these folks had no bussiness getting a loan for that amount....BUT I WAS ONLY DOING MY JOB,
Nazi War Criminals were 'just doing their jobs' as well.
Pull up a chair, sit back, crack open a cold one and embrace the cannibalism.
Pull up a chair, sit back, crack open a cold one and embrace the cannibalism.
Well said. May as well enjoy the show, because we passed the point of no return some time ago.
Is it? Or have society's standards shifted such that the current behavior is accepted and even admired? When large corporations arrange strategic defaults and are complimented on their business acumen, will Joe Sixpack eventually accept the new model of behavior?
Good question - IMHO Joe Sixpack has more than accepted bad behavior - he has emulated it - but is that any real surprise?
Big Corporations and the Political Elite have provided example after example that honesty, loyalty, integrity, concern for the greater good be damned - how much can we make/save/charge/steal/conceal NOW is the current mantra.
One need look no further than Bawney Fwank, Charles Rangel, Chris Dodd, Enron, WorldCom, Tyco, Ernst and Young, Bernie Madoff, BP, Bailout money used for bonuses, Bank of America, AIG, Stanford Financial, GE, Duke Energy, Global Crossing, Qwest Communications, etc., etc., our Big 4 accounting firms (theoretically the watchdogs) have been complicit in the carnage.
The list could go on and on - the examples set by so many of our political "leaders" and set in our large corporate and advisory environments are generally so poor - it is really no surprise that we get JoeSixpack as a late adopter to the lower standards of behavior.
And, the bad behavior is IMO clearly modeled from the top down - before readers say hey wait, business is in business to make a profit - a little personal example - top 5 company by everyone's measure in it's industry - has a little problem. A little research and problem is resolved - presented to lead partner - quality control committee concurs that fix will work - total for fix (approximately 10 years ago) was approximately $35,000. Partners response was - all agree that this fix will work but we need to bill them at least $350,000 for this project go back and make it more complicated. True story.
Is it really any surprise that (many but not all) young associates, staff, assistants, Joe Sixpack, whoever - get exposed to these type of business practices and they start thinking to themselves, hey, this is all monopoly money anyway - let me get mine. Disgusting but predictable - IMHO we need another cultural shift - also starting from the top - WE have tolerated really bad behavior from our politicians and our business leaders for far too long it's the 800 pound gorilla in the room - it's the Emperor without any clothes - it's Joe Sixpack just doing what he observes on a daily basis and it stinks.
It's real funny seeing all the folks giving the borrowers a pass and blasting the banks.
It was congress since the 1970's that built the wall, brick by brick, that the market crashed into.
It was they who forced the banks to lend to poor risks saying "I got your back". So it was off to the races with free money. Things were OK as long as a low % defaulted each year. But "BANG" the house of cards fell.
It's real funny seeing all the folks giving the borrowers a pass and blasting the banks.
It was congress since the 1970's that built the wall, brick by brick, that the market crashed into.
It was they who forced the banks to lend to poor risks saying "I got your back". So it was off to the races with free money. Things were OK as long as a low % defaulted each year. But "BANG" the house of cards fell.
Good points, well taken.
There was a further development. As the banks sought to avoid holding the toxic assets such mortgages created, they securitized the paper through wall street - and this was placed in portfolios everywhere.
The borrowers wanted something for nothing. The mortgage brokers conned the borrowers and the lenders. The lenders conned the portfolio managers, who in turn conned their clients.
Doing the right thing does not seem to have been on anyone's agenda.
GratefulCitizen
01-19-2011, 22:20
Good points, well taken.
There was a further development. As the banks sought to avoid holding the toxic assets such mortgages created, they securitized the paper through wall street - and this was placed in portfolios everywhere.
The borrowers wanted something for nothing. The mortgage brokers conned the borrowers and the lenders. The lenders conned the portfolio managers, who in turn conned their clients.
Doing the right thing does not seem to have been on anyone's agenda.
If you pretend something is insurance (securities, government backstops, etc) without requiring appropriate reserves and incentives, this will always happen.
The only sustainable business model for doing insurance is insurance.
Insured parties must have a stake and proper reserves must be set aside.
All of these shell games were designed to hide risk and create a ponzi scheme.
It's real funny seeing all the folks giving the borrowers a pass and blasting the banks.
It was congress since the 1970's that built the wall, brick by brick, that the market crashed into.
It was they who forced the banks to lend to poor risks saying "I got your back". So it was off to the races with free money. Things were OK as long as a low % defaulted each year. But "BANG" the house of cards fell.
Me personally, I am not giving the borrows a pass what has happened in many (probably most) cases is wrong.
However the Banks were given tax payer funds to cover their losses, after they not only made bad loans but then turned around and bundle those bad loans in the securities. They then knowingly took those misrepresented securities and sold them to investors and pension funds who were then left with an empty bag.......that is fraud.....you and I go away to the BiG House for that in short order.
I have a Nephew who is a Mortgage Broker. His exact words 'Oh we know at least 60% of those that sign are going to default'.
Don't you feel bad? No. It is all legal and if they are stupid enough to sign they deserve it. If some dumb fuck wants to sign and I can get a commission I am all for it.
So if 60 out of every 100 are going to default.....that is losing proposition and they knew it. The banks knew at least year ahead of the 2008 shit storm that it was all going tits up.
The Brokers, Banker, Insurers should all be prosecuted to the fullest extent of the law....a yard arm...but we have no laws that apply to them. The Politicians are part of the problem as well, but, well, you can't post anything about them without fear of retribution from an agency.
Now we get to spectate as they cast stones and feast upon each other. The finale should be a real barn burner of scorched earth and ruined lives.
A good view, Lawn Chair, Cooler, Miller Light...I am set.