850 + days living & working through farm foreclosure

My intent is to share some of the events and experiences as I moved through the foreclosure process with the hope that it may help other small farmers or producers.
I understand the fear you feel and the thoughts that haunt you when you try to sleep. It is with you every minute and it is the first thing you think about in the morning.
If you don’t have a strong belief system, the situation will strip away everything you value and force you to question everything you have ever done. Business relationships and friendships will change overnight.

This part of the story began more than 850 days ago when we asked the bank to restructure our farm loan. The loan was a 90% backed FSA (Farm Service Agency) loan, which meant that if we defaulted they would back up to 90% of the loan which makes it more difficult  for us and the other small farms that have FSA loan financing . We made the first three rounds of payments but soon knew we would have difficulty making the next ones. Before being late on a payment, I went to the bank to discuss a plan to restructure and review our options. Whether it would include selling equipment or some of our property, I was willing to try almost anything to make it work.We were current three out of four loans and strong asset value. To this day I could not believe they wanted these loans to go bad. Instead of reviewing options with us, we were granted a 30-day extension and told we had no choice but make our payment.
We still had a business with a product we could sell and I knew we would get more for it selling it this way rather than liquidate our oil on the junk oil market . We figured out the amount of mint oil we had in inventory and determined what we had to do to make the payment and have remaining inventory to continue growing the sales.
When I called the loan officer to explain what we intended to do, he told us the file was already turned over to collections. At this point my determination was that we still had 7 days left. I asked him about the extension they had promised us and he told me I would have to discuss it with the next loan officer. It was “out of his hands”.

So the time came to meet with the next loan officer and their attorney. This started us down the road that is every farmer’s worst nightmare. We began the foreclosure process.
The first few meetings were all fact finding, securing assets, and reviewing our whole life to see what we had that had any value. They look to liquidate everything you have ever worked for.
Our attorney at the time had very little input to help us. I discovered that what you need is an experienced Chapter 12 attorney that can give you guidance and can help you work out a plan of action.
I can remember the bank officer smiling at me across the table and saying “you have a beautiful farm” while he shuffled though our paperwork. I felt like the proverbial lamb going to slaughter. Suddenly my feeling was that they were not looking out for our best interest but were instead, wanting to just liquidate our farm.
His immediate solution was to sell all of our property, inventory and equipment and we could possibly still keep our house. You can guess how I felt about that. It was devastating to know I was suddenly all alone in wanting a successful outcome.
I learned a long time ago that it is best to not show any emotion in these situations. It is best not to tip your hand as they are only attempting to discover your weak spots. They attempt to plant seeds of doubt, fear and despair. Do not think for one second they will let up on you. They intend to break you. Remember it is not the first time they have done this. They will swamp you with multiple requests for paperwork and copies of taxes, titles and insurance. Their intent will be to wear you down.
After one of our many meetings, I requested to speak to our farm service agent. I was surprised to learn that he was available immediately as he was already in the bank offices, which caught me off guard. The agent arrogantly strolled into the room appearing disinterested and condescending.

We were introduced, shook hands and he stood at the end of the board room table, never taking a seat, just standing over us.

The agent was asked about ideas for other financing alternatives for our farm. He quickly threw out a few names then abruptly stated there is no way anyone will look at you for financing. At that moment, as he spoke, it brought back a memory of  a few years earlier when I had spoken to someone at FSA about financing options. I remembered how he laughed and in a condescending voice stated it would be “tough sledding” for me. Keep in mind that I always try to focus on the positive and throw away the negative comments from people like this. I felt that this type of person should be assigned to an area of the FSA that doesn’t deal with people. With that being said, it is no wonder there was no support for restructuring my loan. The bank had apparently already decided in a meeting prior to mine that restructuring my loan was not an option. Whatever they discussed in that meeting, I determined it wasn’t good for me. I have found this process to be disheartening and humiliating.

My recommendation to others would be to prepare for meetings thoroughly, keep organized paperwork and don’t expect any help. They are not necessarily on your side.

Don’t expect any favors, as they seem more prepared to liquidate than create or encourage. The outcome may be predetermined before you are even involved.

We are still working on preserving the farm and it has only been through new and positive relationships that we will continue to be an option and resource for the many customer’s, who I consider to be friends.

Keeping the faith

Expect miracles

Peppermint Jim

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~ by peppermintjim on April 9, 2009.

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