USURY: Another pathway to relief created by the banks

If the banks have proved anything beyond a reasonable doubt it is that neither their methods nor their documents entitle them to any presumptions in their favor.


For further information please call 954-495-9867 or 520-405-1688

This article is NOT a substitute for getting advice from a licensed professional about any individual case.


Interesting points here. In addition to all the defects in securitization, the banks have long been violating both the spirit and letter of State usury laws. Originally the rates were increased in the Jimmy Carter years when the prime rate went over 20%. It was thought to be “only fair” that the credit card companies be able to get the interest rates required to make a profit.

But when  interest rates dropped for everyone and everything else, credit cards and other consumer loans stayed at the same rates — reaching as high as 35%. In fact the loophole created by that legislation made it possible for companies to lure workers into payday loans whose effective rates were many times the rates charged by credit cards. All of that led to the widespread marketing of consumer “credit” using rates that were considered for centuries as against public policy, impossible to pay and leading to financial ruin of anyone lured into such a deal.

The flood of credit into the marketplace and the lack of education of consumers is what eventually led to consumer complacency on stagnating, and ultimately declining wages. As long as the money was there and sold as “payments” rather the entire debt, most consumers thought they were OK, regardless of whether they got the money through wages or credit. In substance they were no longer buying things, they were renting them. When they maxed out their credit, they just got more credit, at higher and higher rates.


The carryover to the mortgage market was equally stunning. Most loans don’t last more than 7 years and often are refinanced or paid off within three years. Amortizing the fees and other costs with getting the loan at 30 years is a misrepresentation of the true APR.

Negative amortization is even more egregious. In most cases it is obvious from the face of the documents that the loan cannot, under any scenario, last more than five years; it is plain as day that the loan will be ended by foreclosure at that time. Consumers, who have been sold on “payments”, do not realize that they are not borrowing $200,000 when they take a negative amortization loan. Starting with the very first month, the principal due is more than the original “loan” and grows every month.

AND when the principal grows to 115% of the original loan amount the loan automatically resets to full amortization. So the banks failed to disclose the truth in virtually every negative amortization loan. They qualified the homeowner based upon the teaser payment, or the negative amortization payment knowing full well that household income was, in many cases, lower than the the payment required for full amortization on the larger loan principal now demanded by the fictitious lender. So that initial payment of $800 per month jumps to as much as $8,000 per month, far in excess of total household income.


Once again the real APR factoring in all the charges and fees, is far above the APR disclosed on the Good Faith Estimate. And of course the consumer was lured into buying both a home and loan product that could never be satisfied. People say that is the borrower’s fault. But that is not public policy or law. The whole reason for the Truth in Lending Act is that these transactions are far too complicated for consumers to understand.

That is the reason why there are both Federal and State disclosure requirements. What the banks did, with other people’s money, was lend at effective APR that in most cases far exceeded usury laws passed by the states. Someone who paid $18,000 in fees and points for a $200,000 loan has paid 8% in such fees and points. If their loan resets in 3 years, which is the end date of the loan (see above), whatever APR was disclosed should have been increased by 3% instead of the tiny fraction used for the apparent but fictitious end of the loan in 30 years.


Each state has its own remedy for usury. It is many times the basis of rescission but even more than that, many states will impose penalties against “lenders” that include treble damages, and loss of the entire principal.


It has been many years since I first brought this up on the blog. My opinion is that usury, like rescission, paves the way to relief for vast numbers of struggling homeowners who were tricked into loans that could never work.

It certainly adds to the argument that the “transaction” if it was ever consummated by anyone in the chain relied upon by current foreclosers, was without clean hands and that subsequent behavior including fabrication of documents, forgery, etc. should make it impossible for anyone to foreclose on the alleged mortgage.

And it should have an effect on the rules of evidence: given the wrongful behavior at the alleged “closing” and documents submitted in support of a foreclosure should no longer be given any presumption of authenticity or validity by a trial judge. The Judge should require actual proof of the actual transaction rather than accepting a document that appears to be facially valid.


If the banks have proved anything beyond a reasonable doubt it is that neither their methods nor their documents entitle them to any presumptions in their favor.

This application of law would apply to all secured loans and most unsecured loans.

24 Responses


    That includes what goes on in our streets by PUBLIC SERVANTS who think they’re the law of this land.

    Nothing could be further from the truth. They’re paid to PROTECT & DEFEND us from criminals. Instead, they’re protecting WALL STREETS FRAUD BROKERING RING for their political cohorts & minions who they’re comrades with.

    They think these UNITED STATES is their own personal POLITICAL BROKERAGE HOUSE they can use to hold us captive to it.

    That’s why CREDIT BROKERING FRAUD is the devils handiwork, & collecting on it is PERSECUTION of the innocent by WALL STREET POLITICAL HENCHMEN .


    Certainly not the FEDERAL RESERVE BOARD who initiated the DERIVATIVES SCAM of our TITLES.

  3. FRAUDCLOSURE is the CAROL OF THE BELLS – oops then you’rd supposed to be dead – UP ON WALL STREET.


    It’s AKA DREAM OF NAZIFICATION by the COMMUNIST NEW PARTY who think they csn unlawfully hijack our U.S. SOVEREIGNTY under the guise of we’re FOOTLONG SUB SANDWICHES repurchased from the local DELICATESSEN.

    Their motto is we’re chopped ham sandwiches they won’t have come to their FRAUD SMORGASBORD of our LEGAL RIGHTS up on the hill.

  4. NOTICE; for and on the record: any original writings; interpretations or other expressions posted on this blog/website by greg ( is/are the sole copyrighted property of greg (; effective upon each moment of creation; with all rights reserved and none waived; with any other adhesion clause(s) to the contrary within or without this blog/website; notwithstanding; no license to use any such copyrighted property for another’s profit is granted or presumed; in G-d i trust.

    //s// gregory-george gary: hufnagel-groeper clan…
    Date: now for then

  5. for those who care… here is where Jesinoski is NOW!

    Amended Pleadings due by 9/10/2015.
    Discovery due by 12/1/2015.
    Motions (non-disp) due 12/1/2015.
    Motions (disp) due by 2/1/2016.
    Ready for trial due by 7/1/2016.
    Signed by Magistrate Judge Franklin L. Noel on 8/13/15. (LPH)
    (Entered: 08/14/2015)

  6. Then disregard😀😀😀

  7. A man
    i don’t get your taunt?

  8. Greg your all talk no action investigate a judge or are you chicken


  9. here is the Kosterman court docket – case dismissed after being returned from Appellate court (hope it works)

  10. There are three scheduled for the 10th of Feb which would be of interest to readers here imo. Click on Oral Arguments Calendar and then Honolulu Court for February from the 8th to 10th.(at the link I just posted)


    This website has opinions of the 9th. It also has live streaming oral

  12. In SC, at least in my county, you cannot file a Lis Pendens at the Reg. of Deeds office. It must go thru the clerk of court first because many illegal lis pendens were filed to save property from foreclosure.

  13. more trouble
    IL Statutory Update – The end of frivolous recordings on foreclosure properties? SB 1487 signed into law 8-21-15 and effective 1-1-16. The law helps protect the plaintiff, its attorneys, and the judge by preventing owners or nonrecord claimants from recording “maritime” or other internet style liens against the property. The Plaintiff can seek a court order barring an owner or nonrecord claimant from recording an interest or document against the property without a court order

    (55 ILCS 5/3-5010.7 new)
    Sec. 3-5010.7. Foreclosure property pilot program.
    (a) The recorder in a county with a population of more than
    3,000,000 shall establish a pilot program that permits
    documents to be recorded against a property in foreclosure by
    judicial order only.
    (b) Beginning January 1, 2016, upon motion by the plaintiff
    in a foreclosure action, the judge shall issue an order barring
    any nonrecord claimants from recording, without approval of the
    court, an interest on the property that is the subject of the
    foreclosure action. The order shall also prohibit the owner of
    the property from recording any document without judicial
    approval except for court orders related to the foreclosure
    case or court orders related to the property that were entered
    after the effective date of the order prohibiting recordation.
    The term “nonrecord claimant”, for purposes of this Act, has
    the meaning ascribed to that term in Section 15-1210 of the
    Code of Civil Procedure. The order shall expire on the date of
    the court order confirming the judicial sale of the property
    pursuant to a judgment of foreclosure unless renewed by order
    of the judge.
    (more in link)

  14. Every bank manipulated the LIBOR.

    I believe they became even more predisposed to Fraud when they weren’t caught manipulating these interest rates in their favor.

  15. from the same article:
    Lack of Standing Declared an Affirmative Defense to a Mortgage Foreclosure.

    Although there was a vigorous dissenting opinion, the majority of the court in U.S. Bank, N.A. v. Kosterman, 2015 IL App (1st) 133627, held that lack of standing on the part of a litigant is an affirmative defense the opponent may raise, even in a mortgage foreclosure case.

    On October 20, 2006, Matthew and Amy Kosterman executed a mortgage in River Forest, Illinois. The mortgagee was HLB Mortgage, a New York corporation.

    On October 18, 2011, U.S. Bank, as trustee, filed a mortgage foreclosure complaint due to the Kostermans’ failure to make required payments. The Kostermans argued that U.S. Bank did not have standing to bring the foreclosure action against them. Although the trial judge refused to credit the Kostermans’ argument, the appellate court did, saying in unmistakable terms, “The Illinois Supreme Court has made clear that a challenge to standing in a civil case is an affirmative defense.” 2015 IL App (1st) 133627 at ¶10.

    Passing for a moment on the failure of the trial judge to acknowledge the affirmative defense, the court next directed its attention to the fact that the trial judge had gone on to award summary judgment to U.S. Bank.

    The record indicated that the Kostermans’ discovery requests and a notice for telephonic deposition for a U.S. Bank Vice President, to which the bank had not responded some 15 months after service, had been struck by the trial court, and that 9 days later the trial court had entered an order for possession. Reviewing the record, the court said, “The events leading up to the trial court’s ruling essentially amounted to summary judgment by ambush.” 2015 IL App (1st) 133627 at ¶17.

    Based on the failure of U.S. Bank to substantiate its standing to sue and the cavalier attitude it exhibited toward discovery compliance, the court vacated the grant of summary judgment and sent the case back to the trial court.

    What’s the point? Lenders that propose to initiate foreclosure must be certain they can assemble the documentation necessary to establish their legal status to initiate the lawsuit and, even in cut-and-dried cases, can’t expect to be granted summary judgment if they ignore discovery compliance.

  16. Apologies…forgot to post the Colorado case:

  17. Tuesday 8 December 2015


    If you are in Colorado, are you in/near the county for the case posted in another discussion, or might you know of someone who could get access
    to obtain the case discussed? Asking, just in case you re nearby. If not,
    no harm in asking.



  18. Neil Garfield posted: “If the banks have proved anything beyond a reasonable doubt it is that neither their methods nor their documents entitle them to any presumptions in their favor.


    For further information please call 954-495-9867 or 520-405-168”

  19. “If the banks have proved anything beyond a reasonable doubt it is that neither their methods nor their documents entitle them to any presumptions in their favor.” Really? Tell that one to the judge (here in Maryland anyway). The only judge that got it was one guy who was brought out of retirement, a judge Wilner. He was astounded at the shit that put in front of him by banks and said so publicly. Did it do the rest of us here any good? Not a chance. The Maryland legislature hurried up and passed some laws ‘requiring’ judges to more careful about what documents they accept. Yeah – ok! That worked real well! We never stood a chance. Banks and foreclosure mills could present (and still do) whatever they want, it does not matter. My attorney told me that if he waltzed into court with fabricated and forged documents his license to practice law would be provoked. How is it that nothing is equal any more? We lost our home and have a pile of legal bills and and a drained 401k.

  20. In Colorado there are broad exceptions for application of usury laws to mortgage loans. However one might argue that a securitized mortgage is not a mortgage, and thus subject to all of these limits..

  21. No enforcement of the usury laws helped the banks to run amok. The lack of regulation of the banking and financial sectors is legion. Lately, I am reading about the IRS looking for money–well, how about going after the REMIC Trusts which are neither REMICs nor trusts. However, noting that the IRS is allegedly not a legal entity, maybe that is why the banks get away with this. Just sayin… Just guessin..

  22. The banksters dont care about usury laws because it isnt their money they already made their money on the upfront fees.


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