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Ranch foreclosure takes a strange twist

Guaranteed loans turn rancher’s life upside down.

Forrest Laws

April 23, 2024

5 Min Read
Old Ranch House
Drought, loan interest and attorney fees have added to ranch foreclosure saga.Getty Images

Feb. 7 was the kind of day far too many farmers and ranchers like Shane Castor and his wife, Tina, have come to dread.

That’s the date the sheriff of McClain County, Okla., had set for the Castors to vacate their home and ranch land, property Shane had spent years building into what his neighbors considered a showplace.

In better times, Castor had obtained a USDA Farm Service Agency-guaranteed loan from People’s Bank & Trust in Edmond, Okla. Several years of drought and the 2022 jump in interest rates put him behind in payments. Then People’s Bank & Trust foreclosed and scheduled a sheriff’s sale of his property on Dec. 19, 2023.

But, instead of the sale and subsequent order to vacate the property giving the Castors closure or a new beginning, it became one more in a series of twists and turns involving FSA-guaranteed loans that have turned the Castors’ lives upside down and have left them and other borrowers wondering what to do next.

“We tell our story and most can’t believe it,” said Castor, a Native American who has spent most of his life working on a ranch. “We are homeless. Tina has dipped into her retirement. We have lived in multiple motels and with our daughter. We keep thinking we should make a movie out of this.”

Variable interest

Besides the droughts that have hit Oklahoma, the interest rate on his variable rate guaranteed bank loan went from 6% to 11% in 2022 after the Federal Reserve began its inflation reduction interest rate hikes. The bank also added more than $400,000 in fees and penalties to his balance

The time leading up to Dec. 19 seems like a blur to Castor. After months of telling him help was on the way, his county Farm Service Agency finally provided a check made out to Castor and People’s Bank and asked the bank not to proceed with the sheriff’s sale on Dec. 19, six days before last Christmas.

Instead of applying the funds to Castor’s account, the bank placed it in escrow and went ahead with the sale of Castor’s home and remaining land. (People’s bank had seized his cattle and most of his equipment when it began foreclosure last April.)

Castor and his attorney, Joey Schmidt of Norman, Okla., who is working with a number of farmers and ranchers in similar circumstances, filed suit to prevent the bank from taking his home. The judge ruled in the bank’s favor.

On Dec. 19, Venture Beef LLC put down a deposit for 10% of the high bid in the sale of $2.27 million. The balance of $2.04 million was due when the sheriff’s sale was scheduled to be confirmed on Feb. 7. (The home and land were appraised at $3.4 million prior to the sale.)

Neal Cattle Company LLC deposited a check for the $2.04 million with the Court Clerk of McClain County on Feb. 7. The sheriff’s sale was confirmed and Neal Cattle Company moved about 300 head of cattle on to the land.  

Vacating property

The Castors and their neighbors had begun moving their household furnishings to storage units while the Castors looked for a new home. The Castors and one of the neighbors worked through the night of Feb. 6 to move Castor’s belongings and tractors off the property before 8:30 a.m. on Feb. 7. Tina Castor also cleaned the house.

“My neighbors have been very upset by what happened,” said Castor, who has worked as a basketball referee and baseball umpire to supplement his income, “And especially by what happened after the sale.”

The sheriff of McClain County delivered a sheriff’s deed to Venture Beef LLC after Judge Leah Edwards ruled during a hearing that the sale was confirmed, according to court documents filed by Kevin Blaney, attorney for People’s Bank and Trust.

“After numerous attempts by the Circuit Clerk over a more than two-week period to have the Purchase Price Check paid, the $2,043,900.00 Purchase Price Check was returned to the Court Clerk of McClain County due to insufficient funds,” according to the court filing.

Blaney and Peoples Bank asked the court to vacate the sale and cancel the sheriff’s deed, citing the returned check and the damage to the property from the “hundreds of cattle placed there by Venture Beef LLC, Neal Cattle Company LLC or some other company owned by Mr. (Derek) Neal.”

Neal Cattle Company personnel changed the locks on the Castors’ home. The Castors have been reluctant to change them back, although the court restored the home to them, because of the uncertainty of the legal situation.

Care for cattle

What about the cattle now residing on Castors land? Castor and one of his neighbor’s sons have been feeding them, and Castor has helped some of the cows with calving because that’s what ranchers do.

“I have been taking care of feeding – 42 round bales of hay last week – and calving out many of the cows and having to pull and assist cows with very high birth weight calves over the past several days,” Castor wrote in an email to FSA officials in late March.

Meanwhile, People’s Bank scheduled another Sheriff’s Sale on April 23. Castor says the payoff on his loan as of March 22 was $860,000 – a loan balance of $450,000 and $410,000 in penalties and the guaranteed lender’s attorneys fees.

As the end of the bank’s first quarter approached, it offered to cancel portions of his debt, but only if he would agree to sign the deeds of his remaining property to the bank.

He has also been discussing the situation with Farm Service Agency officials to determine if more help can be provided through Extraordinary Measures that are available to guaranteed loan borrowers. Schmidt and Tina Castor have also filed a detailed application through the Discrimination Financial Assistance Program provisions of Section 22007 of the Inflation Reduction Act. The deadline for the program was Jan. 13. No payments have been announced to date.

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About the Author(s)

Forrest Laws

Forrest Laws spent 10 years with The Memphis Press-Scimitar before joining Delta Farm Press in 1980. He has written extensively on farm production practices, crop marketing, farm legislation, environmental regulations and alternative energy. He resides in Memphis, Tenn. He served as a missile launch officer in the U.S. Air Force before resuming his career in journalism with The Press-Scimitar.

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