Here is Patsy Campbell court full dockets.

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.

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.

Lawyer Robert Summers, below, who represents the current owner of her loan, has faced seven appeals of the foreclosure action from Ms. Campbell since 2000.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.

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.”

13 Responses

  1. It boggles the mind when you think about a bank losing track of the mortgage! It shows that they don’t even see our property as family homes or even us as people for that matter. Were not important enough to even keep record of who we borrowed mortgage money from. Our homes are just pawns in the rich mans game. They gambled on us to lose our families shelter. They wanted us to lose so they could make more money. It wasn’t even important enough to keep our documents secure or properly recorded. Those mortgage notes should have been treated like money. Like they mattered, if they fell out of your pocket you would pick them up. maybe put them somewhere safe. Assholes. They thought they could just lay that money around without a care. I hope they lose. I hope their carelessness bites them in the ass and they can’t get the ‘money’ back, cause they didn’t take care of it, they didn’t care.

  2. neidermyer,

    That’s not true, the time limit for statute of limitations to run, starts at the time of the payments stopping, nothing any bank or dept collector does restarts this timeline, ever. Once the time is up, say six years, for my state of PA, the dept is permanently null and void and non-collectible by anyone, no matter how many times it’s been sold. After the time has passed for the SOL, all you need to do is take the entity trying to collect to small claims court, bring up the SOL, and win instantly, and claim 3K as a prize, plus never having to deal with the dept ever again.

  3. I should have added to my earlier post that she should sue them and make sure she sues them when they send their first letter within 30 days. In other words, Answer the lawsuit.

  4. Neva and Pamela Edwards ,

    You have both raised excellent points … I believe the time limit is 7 years nationally but states can impose a shorter period… This property is so far beyond the limit it isn’t funny… They are simply re-selling the debt and adding bogus fees and charges each time to keep the clock from running out on it… Time to sue them.

  5. Also know that there is a statute of limitations per state for pursuing a debt.All states have this but they differ state to state.Don’t know about FL. but in WA. state it is six years.

  6. Fair Debt Collection Practices Act says you have to prove the debt with the original note with her wet ink signature on it. They are just the usual debt collectors operating outside the law. Get them for trespassing as well. It is really unfortunate that the police do not see this behavior as illegal. Collecting a debt does not give you the right to harass people, trespass on their land, call them on the telephone at all times of the day and night, slander the homeowner to their neighbors or employers, send them threats of a lawsuit which the debt collector has no intention of doing and, last but not least, representing themselves as attorneys when they are not. The debt collectors need to let go. They paid only pennies on the dollar, and debt collectors frequently walk away from debt too difficult to collect and prove and that is what needs to happen.

  7. You have to give this woman credit. She is in it for the “principle” of the thing….no pun. But she is RIGHT and I hope she gets justice very soon. She deserves that and more.

    One strong message stands out about this case… ….BANKS ARE NOT GOING TO STOP coming after people until they are FORCED to stop. Congress and the judicial system should take heed of this example. They are NOT lenders, they are debt collectors. People don’t matter. Each one thinks they will be the one to score big on this little property.

    Can you imagine after all these years, the attorney’s fees have well exceeded the alleged “debt,” yet they still pursue people like carnivores coming in for the kill. It’s just unreal what lengths banks will go to, to preserve their matrices.

  8. Jan, I’m glad you brought up the “toxic waste” issue. The PSA specifically states that any land with ecological contamination should not be foreclosed on nor be made the property of the trust. Poisoning the well could lead to contamination of adjoining properties and groundwater supplies. 20 gallons of used motor oil in the corner of the back yard might bring the same result, but this path is cetainly not recommended. Not to mention the criminal fines one would be held liable for. But the anger is growing, and it won’t be long until this stuff starts to happen en masse.

  9. #!, first and foremost it is NOT her fault the banks lost her documents and now nobody knows who the real lender is. If there even is one. She says theres not, you have to believe her unless you can prove otherwise. Why on earth would she pay an entity that cant even prove she owes them money? Thats a crazy concept, just pure crazy. Pay the bank just because they say so. Just becasue they say so! So if you need money just go up to somebody and say “you owe me money'” “No I cant prove it, just take my word for it and pay me!” Right. You go Patsy Campbell. If after 25 years they cant prove a debt, I’d file a suit against them for slander and harassment!

  10. to DNY:
    The “change in strategy” is a result of the way software programs are set up for preparing filings in the BK Court; those programs are not structured to allow a property to be listed in Schedule A and no corresponding secured claim. The people who write the software had no imagination, and did not conceive of a situation where a creditor claim was going to be represented as unsecured. You have to fill in these forms by hand to obtain that result.

    Beware the commercial BK software.

  11. The original debt may well have had PMI on it, and the Note was fully paid – just not paid by Mr. or Mrs. Perry. What you end up with is a paid Note but not stamped Paid, so the Note continues to float in commercial circulation. Another argument that Mrs. Perry has overlooked so far is that none of the putative lenders seem to have surrendered the Note to the COurt in exchange for a foreclosure decree. Yet that is a requirement pursuant to Florida appellate Decision.

    What lenders or pretender-lenders are going to start running into is a more violent response, there is a home just two miles up the road from mine that was “foreclosed” by a mill for GMAC. the owners moved out, but not before trashing the place. The listing real estate agent candidly advises that it is beyond economic repair and offers a demolition figure of $9,000. The $385K Note has turned into a Listing for $200K for the bare land. haul the rubble away.

    Yet even that is not going to be the end of it. Homes on well water are particularly susceptible to having a five-gallon pail of toxic metal sludge from the local plating company tossed in; toxins like cadmium, chromium, or phenols make any well utterly useless for 10,000 years. this is “Mutual assured destruction,” except the “lender” is now on the hook under Superfund laws to remediate the soils as hazardous waste. Figure $5,000 a cubic yard for removal and disposal, for a well 190 feet deep with a plume extending in radius 200 feet, and do the math: you end up with a $15MM cost on the property. the is the cost of aggrievement.

    And even that is not going to be the end of it. I fully expect the infuriated to, by some percentage, oil up their guns and go hunting: for foreclosure attorneys, mills, “lender” officers, servicers. With 400 million guns in the US, I am surprised that this has not taken on large-scale proportions yet. Won’t be soon. that is the cost of failure to negotiate.

  12. “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.”

    What’s up with the change in strategy in bankruptcy court?

  13. Commercial Services of Perry needs to just give up … they probably paid no more than 2-5% on the dollar to buy the loan anyway. This goes back to the first S&L crisis and the debt can never be truly verified and they cannot re-create a payment history.

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