Take It From Grandma: You Can Fight Foreclosures
Longest. Foreclosure. Ever. Patsy Campbell, according to the Wall Street Journal, lives in Central Florida and hasn’t made a mortgage payment in 25 years.
The 71-year-old retired insurance saleswoman seems instead to have made a career out of fighting foreclosure to keep her $203,000 house. Or, as the Journal puts it, “She has seen seven great-grandchildren born, plum real-estate markets come and go and the ownership of her mortgage change six times.” Campbell inherited her house, which has aluminum siding and a swimming pool, when her husband died in 1980, but stopped making payments when she got ill in 1985. Since then, she has fought foreclosure with a number of arguments, including saying that the mortgage never passed correctly from one holder to the other.
It’s a case that no one but a laywer could love—unless you’re one of the millions of homeowners in one stage or another of foreclosure. Then maybe you can learn from this fightin’ grandma. Three lesssons stand out from her story:
1. Appeal Your Butt Off
This is easier in some states than others. There are 23 states known as “judicial foreclosure” states, which means what it sounds like: A foreclosure has to go in front of a judge. That means, though, that the homeowner can appeal, and therefore delay the process. I’m not talking a few weeks’ delay; I’m talking months or years. In New York, New Jersey, and Florida, it now takes more than a year for your house to go from a missed payment to a full foreclosure.
2. Follow Who Owns Your Loan
Once you get a mortgage from one bank, they’ll often resell it to a different bank. In Campbell’s case, that second bank would start to foreclose, and then have a change of ownership, causing the whole process to start over again. Figuring out where your loan has ended up means you can’t stick your head under a rock, but it’s worth paying attention. Even in recent times, we’ve seem a string of big mortgage lenders go through mergers, like in 2008 when Bank of America bought Countrywide. Another ray of hope: Depending on who owns your loan now, if you have a couple of late payments, but haven’t been foreclosed on, then an “FHA short refinance” is a possibility.
3. Consider Bankruptcy
Taking a bankruptcy is no small thing —it will hurt your credit record, sitting there for at least seven years, maybe more, making it tougher for you to make big purchases like other homes and cars. But Campbell filed for bankruptcy as a last defense, because in a bankruptcy, you can usually keep your primary residence.