Banks and Servicers Really DO Tell Homeowners Not to Pay — To Trap Them Into Foreclosure

The story is basically the same. Hundreds of thousands of homeowners were told that in order to get refinancing or modification they needed to stop paying their monthly mortgage payments. This was a ruse. It was also practicing law without a license. It was a lie aimed at trapping homeowners into a position where they could not recover. Thousands of judges have heard the same story from hundreds of thousands of homeowners and still they refuse to believe it.

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The goal is to get homeowners into foreclosures. The plan is pretty simple. Use any means available to force the homeowner into a foreclosure. This takes several forms — one of which is the intentional “negligence” in the posting of payments and forced placed insurance that I have previously written about.

But by far the the largest scheme at work is the wrongful representation that homeowners must be 90 days behind in their payments in order to be considered for any modification or refinancing. It just is not true. And it never was true.

The script given to “representatives” (call centers) is careful not to specifically say “you must stop making payments and continue to make no payments for at least 90 days”. Instead the script contains a lie about how if they are current they cannot be considered for a workout, refinancing or modification.

And getting them to stop payments means that they won’t get refinancing because they will already be delinquent on their current “mortgage” loan.

And getting them to stop for at least 90 days means that for three months the beleaguered homeowners THINK they have some relief, while at the same time the “delinquency” is mounting to levels from which they can never recover.

All this is happening while the frightful homeowners receiving notices of foreclosure are told not to worry about it — it’s just one hand not knowing what the other is doing. But in the vast majority of cases the foreclosure notices are real and the promise of refinancing or modification is simply a lie.

ESTOPPEL: There actually is a legal doctrine that covers this situation without establishing a fiduciary relationship. Reasonable reliance upon a representation that misleads the homeowner into taking actions that work to their detriment is covered by the doctrine of estoppel. It works in many situations. The statement that homeowners must be 90 days behind to be considered for a workout, refinancing or modification is untrue. The homeowner is reasonably relying upon a large financial or non financial institution to give them correct information inasmuch as the institution has greater access better understanding of the laws and rules. If the homeowner reasonably relies upon such representations to his/her detriment the bank or servicer should be stopped, in a court  of equity, from taking advantage of an action that was the proximate result of their own representation.

Most judges and lawyers still look at the mortgage situation through the lens of law school and their early practice — before the era of “securitization fail” (Adam Levitin). The thought that banks would want loans to be non-performing is preposterous through that lens. But it would also be preposterous for those same banks to have spawned an era of fabricated, fraudulent and forged paperwork that led to multiple consent decrees and the 50 state settlement.

The plain truth is that the old lens is occluded, in need of cataract surgery.

If you remove the premise that the banks want the “loans” to be performing and substitute the premise that they want the loans to be non-performing, everything makes sense. Of course this dove-tails with my many earlier articles about the absence of an actual loan contract. The business model of the banks is essentially a cover-up and making a profit from the cover-up as much as the original illegal acts.

What the banks have succeed in doing in millions of foreclosures is the introduction of a court order into an otherwise false and broken chain of claims of ownership and authority by those who stole money from investors and now regard the loss of homestead as collateral damage to people who just don’t matter.

The court order or Judgment does something that none of the prior fabricated, forged, robo-signed documents could do on their own — it provides cover for all the preceding illegal acts because a court order is presumed to be the law of the case. The courts have been the unwitting pawns in this game whose strategy crosses both state and international boundaries.

And perhaps the really shocking thing about all this is that the bank crisis in 2008 was in actuality an illusion. The only thing the banks stood to lose was prospective profits. Their scheme hoodwinked the highest levels of government. That’s what happens when you rely on the conspirators to provide data on a crisis they created out of thin air. They knew there was nobody in government who could figure out why the banks were hard selling loan products that were (a) unprofitable and (b) doomed to fail. The banks did not engage is risky behavior. There was no risk to them. It was only risky for the rest of us.

Somewhere along the line here the courts are going to get cornered into finally deciding what happens when a thief steals money from someone and then uses some of the money to lend to someone else, without either the victim of theft or the “borrower” knowing the truth.

12 Responses

  1. Eight years past for myself and it still amazes me to read about borrowers challenging their cases believing their chances or story will bring a different outcome. Drink up, you’ve been scammed.

  2. Oh — and the 4th District called that Promissory Estoppel, and profiting from your own wrong doing.

  3. Of course they do. My own case proved that.

  4. We had sent a mortgage payment once and it was sent back some days before Christmas. This happened a few years ago.

    Christmas time is the time junk debt collectors and some crooks becomes greedy for money. What a shame when they demean the goodness of Christmas..

  5. Dear Chris,
    Thank you for your information. A member of the Lendinglies team will call you or you can submit documents to us at Proof of Racketeering is always welcome.
    -Lending Lies Moderator-

  6. I’m sure the Banks motto is, ” Homeowners Lives Doesn’t Matter”.

  7. My deceased husband (dropped dead of heart attack, Thanksgiving Day 2010 while fighting the illegal foreclosure of our home of 20 years) unwittingly trusted JPMC(WaMu) when they insisted he had to miss 3 payments in order to receive the DUE DATE CHANGE they offered and he wanted. Borrower NEVER requested a rate/payment modification nor refinancing and was NOT in default prior to JPMC instructions to not pay. Should be noted, husband (only borrower) retired from the finance industry (Beneficial/HSBC) after 33 years…so he knew that JPMC was forcing him into default when they demanded he miss 3 payments. Instead of receiving the promised DUE DATE CHANGE, exactly 3 months and 1 day after agreeing they ‘finally’ had the necessary paperwork, the Sheriff appeared at the door with the Foreclosure Summons.
    As the spouse/heir, Quit Claim Deed holder and named Defendant, I was NOT Process Served…I was denied my Constitutional Rights of Due Process and was prevented from appearing in court to challenge the stealing of my home and my deceased husband’s estate.

  8. I have been telling lawyers and judges about this video…I think my old lawyer threw my case under the bus and used my info to settle a 42 Million Case on this very issue…but they sealed it.

    at 3:24 he says We Don’t Re-work Current Loans. Check your Twitter I sent you a video clip.

    BOA CEO Clearly states “We do not re-work current loans”

    Call me if you can I have other proof of racketeering.

    Chris Culbert 305-970-9124

  9. Victims of Theft ….. YES!
    Borrower. ???
    Would that be the Note or Mortgage?
    Or Both?

    KC asked Legal Question.
    Where KC’s Money?

    Legal Answer Given ..
    To Fund More Loans.


  10. We hear u james. Just make sure future generations ahead know of the banks evilness. I would love to see the nig banks fall as us homeowners have driving us deeper in debt and ruining our credit so should a similar fate happen to them. We dont need them. They need us. All their ill gotten gains will soon fall with them. I say an eye for an eye.

  11. yea, welcome to my world… WF did the same to me in 2010 and sold my home to someone else… totally screwed us… plunged us into deep depression… our lives are yet to be better… what a bunch of BS to have your bank LIE like that. to a customer who’s been loyal for 30 years to you. I light a candle that something really BAD happens to all of those involved. I wish there lives to be crushed as much as ours is, was and will be because we can’t recover for this without help we’ll never see. Only the rich survive, the middle struggle. You can’t get help if you can’t afford it, and that’s what the banks count on. period. I wouldn’t put a freakin penny in Wells Fargo as long as I live and tell anyone who will listen.

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