Linda Hatchell, Woman in $1 Foreclosure, Responds

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Linda HatchellYou may recall the story of Linda Hatchell, a Glen Ellyn, Ill., cancer survivor who is staring down foreclosure on the Victorian home she spent $1 to buy, but tens of thousands more to relocate and lovingly restore.

After sharing her story earlier this month, AOL Real Estate was inundated by hundreds of comments, emails and questions about Hatchell's predicament.

To follow up on her status, we caught up with Hatchell for an update on her struggle to keep the home she loves, and to set the record straight on her ongoing legal battles with the lender.

Hatchell bought the Queen Anne Victorian home in 1989 for just $1, provided she agreed to finance the relocation of the historic home to a new neighborhood. To cover the moving costs, she borrowed about $50,000 and some additional cash for odds and ends. In total, she borrowed $95,000, taking out a 15-year fixed mortgage.

And things were going swimmingly -- in 14 years, she was never late on a payment, Hatchell says. Then, in the final year of the mortgage, she and her husband decided to refinance.



The couple took out a new loan for $359,000 to consolidate debt and to buy some investment property. The year was 2005 and home values were still on a meteoric rise in many markets.

"Looking back, I shouldn't have done it," she told AOL Real Estate. "But it wasn't a bad move at the time. We had a plan."

Hatchell had been working as a licensed mortgage loan officer since the late 1990s and knew the risks involved better than most. At the time, the home was appraised at $675,000, so the loan amount would only tap a little more than half of the couple's home equity. To top it off, riding on the wave of mortgage activity during the housing boom, Hatchell says that she was making more than $100,000 a year in the loan origination business.

But as the housing market started to turn, so too did her good fortune. By 2008, the mortgage market was tanking, and her commission-based business was quickly drying up. Hatchell did her best to stay current on the mortgage by supplementing her income with work in the insurance industry.

And then the bottom dropped. In November 2009, Hatchell was diagnosed with breast cancer. Her earnings -- and much of her savings -- were soon diverted into expensive medical procedures. She says that she has since had a double mastectomy, undergone chemotherapy, and had a part of her pancreas and spleen removed.

"I sold off coin collections, silverware sets, antiques, and anything else I could to be able to eat and keep the utilities on," she says. She managed to stay current on her loan for the next three and a half years.

But now she is 38 payments behind on her mortgage -- a downward spiral that she attributes to her lender's inflexibility.

"When I was one week away from being three payments past due on the mortgage, I called the bank and said I could make two payments to them," she says. "They refused to take this payment, and demanded three payments or nothing, and they would foreclose on my home."

After seeking help from the American Cancer Society, Hatchell was able to fight the foreclosure and remain in her home during the proceedings. Her legal team's main contention, she says, was that the bank never offered to guide her through the federal government's Home Affordable Modification Program (HAMP), which is intended to stop foreclosure through loan modification.

AOL Real Estate contacted the lender, Bank of America, and provided the details of Hatchell's case and her account information, but has yet to receive a response.

Linda HatchellMeanwhile, according to Hatchell, the lender plans to once again move forward with foreclosure proceedings and she could soon face eviction.

Hatchell currently owes a balance of $342,000 on her mortgage, not including late fees. She would love to keep the home, she says, but she's realistic: The house is listed for sale and she and her husband are prepared to move if faced with eviction.

"My wish is that I do get to keep the house," she says. "But if I do have to sell, I want to sell it to someone who can keep it going for another 100 years."

Since her story went public, Hatchell says the outpouring of support has been "tremendous."

"I'm getting donations from all over the country," she says. "It would be a miracle if I get to stay here."

Hatchell says she's very grateful for readers' support and has made it a point to respond to any mail she receives.

An account in Hatchell's name has been set up at givinganon.com, a nonprofit site that sends checks anonymously on behalf of contributors. To learn more about givinganon.com, visit their about page.

To see Hatchell's Victorian home in Glen Ellyn, visit the listing here.

See other homes for sale in Glen Ellyn, Ill., on AOL Real Estate.

See also:
Viewpoint: Feeling Guilty About Buying a Foreclosure?

Foreclosure Victims Plan Protests Across U.S.
Viewpoint: What's Behind Banks' Big Foreclosure Push?
101-Year-Old Foreclosure Victim to Get Home Back

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