Mortgage Meltdown: For People Already in Trouble

We received the following plea for help. I have changed the name to protect privacy. But both the plea and the answer are applicable to many people, which is why we are publishing the Garfield Handbooks. I will shortly publish a way for you to down load the books and forms and purchase the book on line or in hard copy. 

“hello my name is John Smith i am currently in chapter 13 bankruptcy countrywide has currently forclosed on my property the bank brought it back and is currently moving to evict me i beleive there were bogus fees and my atorney did not want to argue the issue , my payments went from $1900 to $2800 to $3850 within 18months adjusted twice please send me info so i can fight back”

First thing you need to do is calm down because allowing yourself to be overtaken by anxiety will lead to bad judgment, unclear thoughts and strategies that could make your situation worse.

Second thing is it would be nice if you would order the Garfield Handbook for Borrowers in the Mortgage Meltdown Crisis by sending a money order for $19.95 payable to General Transfer Corporation and address it to Neil F. Garfield, 4980 S Alma School Rd., A-2, Suite 124, Chandler, Az 85248. I will send you via email the  current manuscript and give you free updates for 60 days. If you want it in hard copy, send $29.95 including shipping and handling. Whether you do or don’t buy the book (which helps defray the costs of servicing the thousands of people stuck in your position), I will help you as much as I can right here and right now. 

Third thing you should do is consult a lawyer that is local and knows the ropes. After reading this email a lawyer might be willing to help you without a retainer because of the possibility of getting paid by Countrywide or even in a class action. The lawyer should consider joining one of the many class action lawsuits that have been filed. Make sure you join one that is for borrowers and not for investors in CDOs. If you must proceed on your own, here are some tips that other people are doing:


  1. Contact the Office of the Attorney General of your State. Do the same in your county and your city. You might find that an investigation is already underway against Countrywide and lenders in general in this massive fraud — and they might even intervene for you. You are a victim and not a bad guy, so don’t get put off by anyone telling you that you should have known better when you signed the documents. Remember, the largest criminal investigation in the history of economic fraud is currently underway in many states and there is plenty of talk behind the scenes about what to do for people like you. 
  2. Contact the Judge’s office in the bankruptcy case and file a copy of whatever you send to the Judge with the clerk of the bankruptcy court. Use letter sized paper, double-spaced with numbered paragraphs. Make sure you send copies of whatever you have sent to the Judge to the Trustee to whom you were supposed to make your payments. Do not expect the Trustee to intervene for you. Adversarial proceedings are expensive and unless you can offer to pay up front, the Trustee is in all probability not going to help you.
  3. You might want to ask for a conversion to Chapter 11, which is available for individuals and which allows for certain “cram down” features that are more likely to get you relief that you might get in Chapter 13 or Chapter 7. But the filing fee in Chapter 11 cases is very high. You might want to get  request leave of court to spread the payment out over time. 
  4. If the bankruptcy court won’t hear you then try everything below in the State Court in your jurisdiction. The clerk of the court will generally be helpful. 
  5. Generally a good time to contact the Judge in person is on a Friday afternoon when the Judge dispenses advise and punishment to lawyers who screwed up in his court that week. At that time you can present your papers (if the Judge lets you) and literally plead with the Judge to help you. 
  6. The Judge on the other hand is seeing a geometric increase in these cases and most bankruptcy judges are (a) not pleased with the change in bankruptcy laws passed by congress and (b) don’t like these foreclosures based upon crazy payment re-sets and (c) would offer some relief as long as they were not inventing law, just enforcing and deciding it. So don’t get crazy with your demands, because the Judge will probably not be receptive to what you have to say. 
  7. Be respectful and not argumentative withe the Judge. You can show your emotion but make absolutely certain it does not come across that you are angry or ready to fight with the Judge. That can lead to handcuffs and spending a night behind bars to cool off.
  8. Do not assume the Judge knows anything about your case (in terms of who you are, where you live, when this case started, when you bought, or what happened when you bought — these are all things you must say in writing, and if you given the chance, out loud in court); but by all means you can assume that the Judge knows the law — better than you do and better than 99% of the attorneys that appear before him or her. In fact, appearing pro se (without counsel) might put you at an advantage because the Judge is likely to use his own knowledge or her own knowledge, to your advantage.
  9. Do not assume the Judge is against you if he/she asks you questions or says things that seem to favor the other side. A Judge is supposed to be objective, not automatically in your favor because of your good looks or the severity of the penalty you are experiencing. 
  10. Be very scrupulous in obeying all time limits and all other instructions of the court. Don’t think you can play fast and loose with ANYTHING. Bankruptcy Court is Federal Court and Federal Court is a lot tighter on rules than you usually find in State Courts. 
  11. Ask the Judge on paper and orally if you get the chance, for a stay or temporary injunction, preventing Countrywide from enforcing the mortgage, filing eviction, or getting an order that would allow  or order law enforcement to come to your house and literally remove you. Do not remove yourself. You might be surprised how long it can take before a sheriff does the eviction. They don’t like this situation anymore than you do, and they are aware of the criminal investigations going on against Countrywide and other lenders.
  12. Ask the Judge to allow you to file an “Adversary Proceeding”. You will get instructions in the local rules from either the Judge or his clerk. 
  13. Tell the Judge in your paperwork and orally, if you get the chance that you want to challenge the mortgage and the note in that they were not computed properly, that the adjustments were not computed in accordance with law, that the amount demanded from you is wrong (too high) and that you have been defrauded by Countrywide and other co-conspirators) on all of the following grounds:
  14. Fraud in the inducement: Countrywide entered into a conspiracy to defraud you and millions of other people to believe that you could, with their help, afford a house that you otherwise believed you could never pay for. You were presented with terms you were led to believe you could afford, but the entire arrangement amounted to bait and switch because the terms being enforced against you now are the not the same terms you started off with. They inflated the price of the home, enlisted an appraiser to verify the value, enlisted a mortgage broker to guide you into a mortgage you could not afford, intentionally distracted you from disclosures that might have alerted you to problems with the mortgage terms and note, and then led you to believe that you had been approved by a financial institution with far superior  information, and upon whom you reasonably relied to verify the value of the home, the reasonableness of the terms of the mortgage, and the lack of any need for an attorney. [Needless to say, if anything here does not apply to you don’t say it]. As a result, you went to a closing where you presented with a pile of papers that you did not understand but which were explained to you by a title agent that was enlisted to tell you the terms of the mortgage and note in such a manner that you would be distracted from understanding that you could not possibly pay for the house, that the house might not be worth what you were paying for, and that the mortgage terms only benefitted the co-conspirators, none of whom assumed any risk in the transaction because they sold the risk to third party investors who were similarly lied to and defrauded. As a result you have been deprived of living arrangements that you could have afforded but which are no longer available, you have spent money improving and furnishing a house that you cannot afford if the price and mortgage terms are maintained, and are faced with the expense and costs of moving, including the threat of literally moving out onto the street and becoming one of the hundreds of thousands of homeless persons displaced by this massive fraud.
  15. Fraud in the execution: You were led to believe by the co-conspirators and third parties that you were signing papers that were the same as what you were originally told by the developer, who probably received a rebate on the yield spread premium, the mortgage broker who also received a rebate, the title agent who received a high closing fee, and the appraiser who also received a fee in excess of the amount that the marketplace would have awarded if the transaction had not been fraudulent. 
  16. Rescission — only if they can give you back everything they took from you.
  17. Usury: The net effect of this scheme was to acquire title to property and sell it at prices that would allow the lender to secure a return that would otherwise be in violation of usury laws.
  18. RICO racketeering: This was an interstate scheme involving co-conspirators from many states and perhaps other countries as well. The scheme violates criminal statutes and cicll statutes. Accordingly the case should referred for criminal prosecution and you are entitled to treble damages and attorney fees.
  19. TIL (Truth in Lending): The co-conspirators intentionally misled you by distracting you from the real terms of the transaction and as a result violated local, state and federal truth in lending laws.
  20. Discovery: The Clerk might help you with this. You want to file requests for Production, requests for Admission, Interrogatories, and a demand for access to the main and ancillary computers containing emails, correspondence and policies of Countrywide for dealing with your case and cases like yours. Get access to emails, correspondence etc. dating back before the loan and relating to the creation of the loan product the borrower eventually was sold. Same for what they know of the other players — developer/seller, mortgage broker, appraiser, relations with investment bankers showing they knew they would not be carrying he risk of the loan ( shows they had not interest other than closing the deal without concern as to whether the deal went bad for borrower or lender). Get screen shots of websites and see if you have copies of web pages that were printed during the loan and sales process. Check for differences. If someone has been fired at the lender for the events leading up to the CDO and mortgage meltdown, get their deposition. Demand copies of drafts of documentation before it was presented to the borrower along with any emails or inter-office memos. Find out if anyone has consulted counsel for criminal exposure, employment litigation, or civil exposure. You can’t get the content of the conversation but you can get the answer to that question if you phrase it right
  21. See my other posts on for more allegations that might be applicable.

Neil F. Garfield, Esq.<>

This is not a solicitation for legal services nor legal advice in your particular situation. I do not know what jurisdiction you live in, I have not interviewed you, you have not retained me, and I am not your lawyer. These matters are complex and generally require the services of competent legal counsel experienced in bankruptcy, foreclosures and lender liability. You should consult with local counsel before doing anything. The information contained in this email is general information that may or may not apply to your situation. 

This transmission may be protected by attorney client privilege and attorney work product privilege if it contains legal advice or opinions, and it contains information that are private, trade secrets, protected by non-disclosure and non-circumvention agreements between the parties and is therefore confidential and privileged. It may also be for the sole purpose of compromise and settlement only if it contains an offer and may not be used in any judicial or quasi-judicial or administrative proceeding without the express written consent of the sender. 

5 Responses

  1. Just like Michael, who posted on February 29, 2008, I say too – that you are a blessing from God. I don’t know about Micheal’s situation, but I can say that mine has passed the 12th hour and is fastly approaching the 13th hour.

    For months now I have been searching for help, but to no avail. Rather than give up entirely, roll over, and play dead, I was coming to the conclusion that I would have to fight this battle all alone – UNTIL – I stumbled upon your website (which included WJ Barnes’ blog about the dangers of self representation). No, giving credit to God, I must say that in my desperation and submission to HIM, He led me to your site. So I did not just stumble there. I believe I was led there.

    I truly appreciate your concern for this “plague” that has affected so many of us, consumers. Having said that, it is my intention to help others in their attempt to find the assistance that they need in order to correct their situation.

    I look forward to your continued insight and help.

    Thank you again!


  2. I truly appreciate how you have explained step by step on what to do. It was extremely thorough and I want to thank you


  3. Great post. Very good advice.

    Thank you!

  4. Hey Neil,

    It is so darn good to finally find someone with some knowledge, concern and compassion for those of us who are being devoured by the corrupt predators who’ve been making out like a feeding frenzy of piranha’s! …
    Someone who is willing to do something more than to simply provide a place where everyone with this problem can only come to post their complaint and join the group of cry-babies who plead for someone to help them, but are unwilling, or incapable, one would assume, of taking a stand for themselves, if the costs of counsel are too prohibitive…
    Which, in my own experience, has proven to be the case.
    At any rate, I wish I’d found your site and helpful information much sooner…
    But, the good thing is that I’ve found it, before it was entirely too late!
    Our own case is in the eleventh hour, fifty-ninth minute… before complete self-destruct occurs!
    Too complex and lengthy to elaborate on here.
    But, thank God! I only asked that He’d provide me with some simple step by step instructions as to how and what I needed to do to enable Him to give us the victory over our oppressors…And then I found your site and information!
    You may not know it, but you’re a blessing from God to this battle weary soul.
    I now feel refreshed and encouraged, and shall rise up and take the battle to the next level.
    I shall return and post, should we prevail and win a battle for the side of the oppressed consumer. I truly expect that we will, now that I have some ground rules and steps laid out for me that don’t simply add to further my confusing, by inundating me with more unnecessary informational overload.
    Without having met, I can tell that you’re a good man… Thanks for the help and for taking the time to lay it out so clearly and concisely… That’s all that I needed and asked for.
    If you like, you may contact me via email. I may be in a position to require some service for which you could reasonably expect some compensation.
    If not, then thank you, anyway!
    I do not care if this is posted or not, I only wanted to thank you!
    Thanks, ever so much,


    p.s. I shall return!

  5. very nice

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