Jeff Swiatek

The Indianapolis Star

INDIANAPOLIS — Lisa Hardy has many of the personal items associated with having a home to call your own: wind chimes on the front porch, a vegetable garden out back, children romping about.

What she doesn't have is a deed, or a mortgage or a rental contract with her name on it.

For the past eight years, the mother of three children has lived for free in a three-bedroom house that has belonged to no one — at least no one who's claimed it.

No landlord or out-of-state bank has ever shown up to demand rent from Hardy. And the fact that property taxes went unpaid didn't seem to matter.

Swamped with thousands of homes abandoned by their owners, the city never got around to selling hers at a tax sale. And buying the place was also out of the question. Hardy couldn't begin to sort out the liens, litigation and past due taxes on her house.

So as the years ticked by, Hardy lived in the 1,490-square-foot house as if her name were on the title. She tended to the small yard, paid for utilities and a security system, and did one other thing.

"I thanked God every single day," she said. "There's not one day I haven't thanked the good Lord for the opportunity to live here without rent."

Hardy's story is "kind of a bizarre case," said Roger Rayburn, director of housing for Neighborhood Christian Legal Clinic.

The clinic has dealt with lots of people facing foreclosure and a few squatters over the years, but seldom someone like Hardy, who is neither, he said. Her case seems to be an odd fallout from the mortgage meltdown that hit Indianapolis starting around 2004 and left the city with thousands of abandoned and foreclosed houses, Rayburn said.

"There were so many bad loans out there that ownership really got kind of confusing," Rayburn said. "A lot of those have been cleaned up. But there are still a lot of properties that are kind of in limbo."

Hardy, 51, is happy to sit on the couch in her neatly kept living room and explain how her house ended up in limbo. She said she was willing to tell her story publicly because she recently heard her house was finally sold at a city surplus sale in July and she's hoping the new owner will do needed repairs to the house and rent it back to her.

Swept up in housing crisis

Hardy was working as a leasing agent for Showhomes Property Management in early 2005 when she got the offer that she came to call "a blessing."

Showhomes told Hardy she could move into one of its houses and live there rent-free for as long as she worked at the company.

"They said, 'Pick out a house,'" Hardy said. So she did: a two-story, aluminum-sided house on Eastern, built in 1910.

The place had just been cleaned and made tenant-ready. It had a porch and parking pad off the alley and was perfect for Hardy, her longtime boyfriend and their two teenage sons (a daughter would be born a year later). Hardy said she felt immediately at peace there.

But the housing market was starting to roil in Indianapolis and elsewhere, stirred by massive numbers of fraudulent and over-priced mortgages. Hardy's employer was right in the middle of the trouble. Showhomes laid off Hardy in early 2006 and went out of business a few months later.

Showhomes' owner was none other than Robert Penn, a Fishers real estate investor who was charged by the federal government with fraud for obtaining more than $16 million in bad home loans while running Showhomes and three other businesses. Penn pleaded guilty in 2009 to wire fraud, conspiracy to commit wire fraud and money laundering, and was sentenced to seven years in prison.

Hardy said she knew nothing of Showhome's troubles at the time and knows little about them even now. All she knew was that by summer of 2006 she was living rent-free in a house no one except her seemed to care about.

Hardy continued to pay utility bills that were in her name and wondered about paying the property tax notices that were addressed to a man she figured was a former investor with Penn. Neither Penn or anybody else from Showhomes ever contacted her about the house, she said.

Hardy said when she called the city to ask about the overdue property taxes she was told not to pay them if she wasn't the owner.

Records show that in 2007, 2008 and again in 2010 the house went into the city's tax sale for unwanted tax-delinquent properties. But there was either no buyer or the property was withdrawn from the sale for legal reasons, said Bill Crawford, chief deputy in the Marion County Treasurer's Office.

Crawford, who looked up the history of Hardy's house in county records, agrees that Hardy's case is unusual.

"This points up some of the problems and challenges we face" trying to monitor and resell the huge number of tax-delinquent homes on the city's books, Crawford said. The city still holds about 3,500 tax-delinquent homes, down from 7,000 two years ago.

A needed refuge

For Hardy, the house provided financial stability when she needed it.

She said she suffered bouts of manic depression that kept her from getting a job and led to her receiving federal disability payments. Her boyfriend also couldn't hang onto a steady job and eventually moved out.

Hardy said the house helped her sons stay out of trouble while teenagers by giving them a permanent, safe place they could call their own. They are now 22 and 23 and living on their own. Her daughter, a third-grader, now has her own room in the house and attends school just six blocks away.

While nearby houses on Eastern fell into disrepair, some becoming havens for drug addicts, Hardy's house seem shielded from the problems of the neighborhood. "Nope, I never had any problems," not even a break-in, she said.

Houses on both sides of hers were abandoned over the last eight years and one was torn down. In the rear along the alley, five houses in a row stand vacant, some stripped of their siding and other items of scrap value.

One reason Hardy said she didn't move out: She couldn't bear to see her house become prey to vandals.

Uncertainty caused anxiety

Hardy said there are downsides to living in a house that has no landlord and isn't yours.

"I lived here on pins and needles. I never knew when I was going to have to go. It was stressful," she said.

Since the house wasn't hers, she was reluctant to spend much money on repairs. She did pay a few hundred dollars to tar the roof when it began to leak and have someone put a tarp over it.

But lately the roof has started leaking again. Cracks have opened in the walls and part of the ceiling near the front door has rotted away from water damage.

Hardy said she was actually relieved to hear last month that her house was sold at the city's July surplus sale for $7,500.

The buyer is a Singapore investment company named CTL Group, which has been buying dozens of low-priced houses in Indianapolis. Hardy said she hasn't yet heard anything from CTL.

In an email interview, CTL's founder and group managing director, Clara Tan Lisin, said her company plans to spend at least $15,000 to renovate the house where Hardy lives.

Lisin said CTL would be happy to rent to Hardy. "If she wishes to be my tenant I am more than happy to accept her as my tenant after my renovation. This saves us trouble of looking for a tenant."

Told about Lisin's note, Hardy said she'd like to take her up on the offer if the rent is affordable.

"I would love to stay here. I'd love to do another nine years, to tell you the truth."