The 25-year ‘foreclosure from hell’

By mounting countless challenges to her foreclosure proceedings — burying her lenders in stacks of legal paperwork — a Florida woman has lived in her home without making a mortgage payment since 1985.

By Robbie Whelan of The Wall Street Journal

The 25-year 'foreclosure from hell' (© Robbie Whelan/Wall Street Journal)Click to enlarge picture

Patsy Campbell has not made a payment on her Okeechobee County, Fla., home since October 1985. // © Robbie Whelan/Wall Street Journal

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 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 Campbell. “I intend to stay in this house and maintain it as my residence until I die.”

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 Campbell has managed to avoid both paying her mortgage and losing her home, which is 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. (Bing: Which states have judicial foreclosures?)

Read: 8 tips for choosing a foreclosure attorney

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.

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Homeowners vs. the banks
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Nov. 22: Foreclosure attorneys Matt Weidner and Mark Stopa talk about a weekend seminar they held in Florida to educate struggling homeowners.

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.

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, which own 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 Campbell’s 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.

What’s your home worth?

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. 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 prefab barns, animal feed and lumber line State Road 710 leading into town.

Read: Foreclosure limbo: What to do

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,” Whitehall says.

Court records outline the rocky road Campbell’s loan has taken over the past 32 years. In 1978, Paul Campbell purchased the house on Southwest 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, Patsy 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.

12 Responses

  1. […] View the original article hereBookmark on DeliciousDigg this postRecommend on Facebookshare via RedditShare with StumblersTweet about itSubscribe to the comments on this post Share and Enjoy: […]

  2. I commend Patsy Campbell; knowledge is power!
    “Pendency of action” is what allows for the possessory rights and your interests to the usefulness and necessity of your property to be protected and sustained by way of the legal process. This process and “pendency of action” will further allow for other discoverable remedial avenues to be revealed, and the process itself will allow you to benefit from your possession and occupation of the property.
    I can place you ‘pro se’ litigants in NV and CA in contact with this person. It will cost you considerably less money than an attorney. E-mail me at

  3. What if you’re not a neighboring state, how strong is this decision? Could it be subpar?

  4. here’s an idea, print these articles and send them to your judges in your local county. you can do an internet search, send the articles to the courthouse care of Judge so and so, find his address, send it to him at his home. How to find his address, simple, go to your local home recorder office, type in his name, find his property address, send him the copy of article. Imagine 100’s of people sending articles outlying the mortgage fraud.

    Start. I’m gonna do it. Join me and dd the same. Lets educate the right people.

  5. wow, this is fantastic. See, the truth comes out. Hooray for the Patsy and others. My friends haven’t payed their mortgage for 2 years now. In fact, they stopped paying the sewer bill, their incoming water bill is on a separate bill which they pay. They figured, what the city is gonna turn off the outgoing water, sewage, not possible. So they have liens on the house for the sewage bill, tough doggy pooh.

    I like it, fight them at their own game, mounds of paper work. Shock and awe, don’t give in, fight back.

    Yip, yip horray for Patsy and others.

  6. Jan van Eck,

    Yes. This is the problem — others are profiting from the foreclosure crisis — and government turns a blind eye – in fact, they have been encouraging it.

  7. GOOD FOR HER! These banks drive me crazy. That is why we fight them tooth and nail.

    Steve Vondran, Esq.
    Arizona Foreclosure Lawyer
    (877) 276-5084

  8. that pond scum is what bred the mortgage servicers.
    the servicers are 2nd generation pond scum, bastard children of banking genetic defects. this is an attempt to collect a debt . fuk u

  9. Sorry….here’s the ruling

  10. The Second District Court of Appeals in Los Angeles has ruled that banks are “legally bound by their loan modification promises,” and can be sued for fraud when homeowners rely on such promises and are damaged as a result”

  11. Yes that is exactly who they are. Bottom feeding pond scum and criminal liars

  12. The outfit “Commercial Services” of Iowa is openly described by their counsel as a “buyer of distressed debt,” which roughly translates to bottom-feeding pond scum that paid perhaps $100 for the claim on the Note. The pond scum buy these in bulk, a few thousand at a time, and figure they can go collect on most of them by “flipping” the property for windfall gains. I have zero sympathy for them. The pond scum, by treating housing as a trip to the casino, are actually making the foreclosure mess much worse; they have zero incentive to settle with the owner, and every incentive to do whatever sleazy thing they can to evict the owner and flip the property for stunning gains. A plague on them.

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