25-Year Foreclosure Reveals Flaws in the System


NEW YORK (MainStreet) — Patsy Campbell, a 71-year-old retired insurance professional in Okeechobee, Florida, has managed to keep living in her two-story home even though she hasn’t made a mortgage payment since 1985 (she bought the property in 1978). Despite repeated attempts by her mortgage lender to foreclose on the property, currently appraised at $203,000, Campbell claims she isn’t going anywhere.

"They're not going to take this house," Campbell told The Wall St. Journal. "I intend to stay in this house and maintain it as my residence until I die."

But how do you avoid the foreclosure swamp, and not pay mortgage for 25 years in the process? The evidence accumulated by Journal reporter Robbie Whelan points to shoddy documentation practices by Campbell’s lenders, along with a string of fortuitous court decisions that have managed to keep the lender at arm’s length from Campbell’s home.

In addition, Florida state law requires that foreclosures must be approved by a judge, a fact that Campbell has taken advantage of time and time again in court. It’s only one of 23 states with such a law on its books.

Throughout the years, judges have had a hard time backing Campbell’s lender, repeatedly ruling in favor of the homeowner for a wide-open menu of gaffes, goofs, and blunders by her mortgage company. Two foreclosure rulings against Campbell were tossed out after lawyers for the mortgage servicer dragged their heels and missed filing deadlines. Another time, Campbell staved off foreclosure after claiming her mortgage was “improperly transferred between banks and federal agencies.” After four lenders took a shot at foreclosing on the home, Iowa-based Commercial Services of Perry is the latest mortgage servicer holding the bag.

By not paying her mortgage for 25-years, Campbell has saved a bundle (she also acts as her own lawyer, saving attorney fees in the process).

A quick look at the BankingMyWay Mortgage Loan Calculator reveals the approximate savings. Given her $100,000 loan at 6% interest, with no prepayments Campbell has unofficially saved $644.30 a month for those 25 years. She has also saved $93,291 in interest during the same time period.

With more than 2.1 million foreclosures on the docket in the U.S. today, an “all-time high” according to LPS Applied Analytics, you have to wonder if there are more Patsy Campbells out there, ready to roll up their sleeves and take on their lenders in endless foreclosure battles.

One thing’s for sure: The mortgage lending industry sure doesn’t hope so.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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