Message to Homeowners Who Have Won Their Cases — Your Demands are Too Low

SETTLEMENT NEGOTIATIONS: WHEN THE HOMEOWNER WINS IN LITIGATION, in every case the banks pay amazing amounts of money to the homeowner (and their lawyer) in order to get agreement on sweeping the case under the rug. Homeowners and their lawyers must realize that the settlement value of their case may be worth 1000 times the judgment value of the case.

This asymmetry in settlement negotiations escapes most but not all winning homeowners. It gets especially urgent when the banks made the wrong decision and appealed an unfavorable decision only to find that they not only lost one case, but many thousands as a result of that one case.

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The banks will do anything to sweep bad results under the rug. And that includes eliminating adverse appellate opinions and trial court opinions.
This is a common practice by them — to wipe out any trace that the entire mortgage scheme (and therefore the entire foreclosure scheme) was a scam. Their strategy makes sense for them. By offering you incentives they get the opinion wiped from the face of the earth. Hence hundreds of thousands of other homeowners who might have contested foreclosure walk away in defeat.

As Charles Marshall has repeatedly said, the settlement should reflect a compromise between the value perceived by the Plaintiff and the value perceived by the Defendant. In this case, the value to the banks is perceived as global — i.e., the impact it will have on currently contested foreclosures and the impact it will have on people who might not otherwise contest the foreclosure. That is the multiplier.

The leverage for the homeowner is commonly perceived — even by the lawyers — as the value of the case at bar. But the true leverage is based upon the cost to the banks generally if the decision stands and God forbid other decisions cite to it with approval. The entire “securitization” scheme would unravel. Wrapping your mind around the discrepancy is key to maximizing the settlement value.

Your case might only involve a $300k mortgage, but that one mortgage has effectively been sold many times, perhaps dozens of times when you include claims of securitization of derivative products (securitization on securitization). Hence your one mortgage loan, based upon fraudulent practices that violated various deceptive lending statutes, sits at the bottom of a house of cars larger than you can imagine. So, for example, you see $300k in value whereas the opposition sees it as potentially $6 million in direct cost that must somehow be hidden in yet another fraudulent cover-up (“resecuritization”).

But it doesn’t stop there. When you win your case it serves as a beacon for many thousands of homeowners — thus presenting a threat of unraveling the epic scope of fraudulent claims of securitization. This “value” is difficult to estimate, much less compute. But if you use an arbitrary number like 10,000 other homeowners will take the case to heart and litigate on those principles and assume that half of them successfully present the case in court citing your case as authority, the cost would easily be in range of $1 Billion.

The banks will do anything to distract you from the essential truth of what I have said here. And part of their strategy is always to propose a settlement that is so low it undermines the confidence of both the homeowners and their lawyer. Or they will offer a “modification” that makes no real difference in the bogus economics of the loan. It makes the $1 Billion seem like a fantasy but it isn’t.  Of course settlement value is not going to equal the bank’s risk factor ($1 Billion) but it is based on their perception of the likelihood of that risk crashing in on them.

Thus the give and take of negotiations depend upon how hard the homeowner is willing to push. And it must be kept in mind that at some point (far below $1 Billion) the banks would rather take the hurt of whatever your case brings than let it be known that a homeowner with a $300k mortgage became obscenely rich by exposing the fraudulent nature of the entire consumer mortgage and debt market.

18 Responses

  1. Does anybody have a referral for a national firm or attorney who practices throughout the country that have a proven track record in getting noteworthy settlements for the homeowner?

  2. @Lance Cassino:

    Glad to see you are still giving them hell out west Marine!! Check in with Atlanta between salvos(;o)


  3. Stan, Sundquists were getting $6MIL through the courts; I believe the bank doubled the offer to shut them up.

  4. This is the answer, repeated over and over, to requests for discovery:

    HSBC objects to this Request for Admission on the basis that it is unduly burdensome, oppressive, annoying, and sent with intent to
    harass HSBC in violation of Wis. Stat. § 804.01. Further, this Request is irrelevant and outside the scope of permitted discovery as it seeks an admission pertaining to an issue which has already been litigated and dismissed in other forums, as outlined in HSBC’s Brief
    accompanying its Motion to Dismiss the Rinaldis’ Counterclaims, filed with the Court on September 20, 2017. In light of the unduly burdensome, oppressive, annoying, irrelevant and harassing nature of these Requests for Admission, HSBC has moved the Court for a protective order pursuant to Wis. Stat. § 804.01(3). To the extent a response is deemed to be required by the Court, HSBC will provide a timely response following the hearing on that motion.

  5. Mr. Henderson, thank you for your enlightened commentary.

  6. I would love to discuss this with you and your listeners at length. I refuse to sign confidentiality agreements. In my first case against bank of america attorney for the bank – severson and werson lawyer – put confidentiality language that was never discussed or agreed to. I had to force the judgement and the attorney was asked why he did this he said he forgot.

    I have sued b of a three times and came in on a trial i Los Angeles after the Sundquist case. These banks have damaged people under contract, and tort law. Underneath these cases are collusion with Home owner association and the bank; forced insurance; bad faith insurance. In the last case the partner for Locke Lorde said “we know where this is coming from” regarding the settlement number being pushed up over a million on a case with problems. You bet – these cases are valuable -children are committing suicide; parents are unable to work from stress from years of being jerked around in a control fraud.

    I have had the bank lawyers misquote law and then tell me it goes out that way all the time; i have had watched them lie so often they don’t even know they are doing it. Their PMKs consistently perjure themselves. They send discovery with key codes mixed up so you are delayed receiving it. I have two cases where after trial they re-violated the customer and have had to re-file in the court and severson and werson move it to federal – where it is delayed a year and a half. The thing bank lawyers do not understand is that their clients have a problem false promises; fraud; breach of contract and IIED. Most of these cases are emotional damages with little compensatory sometimes because people are trying to survive and have spent money on non compensatory losses. It costs 150-300k to get these through trial.But it plays well to a jury and a judge.

    We can get these cases to trial if you don’t give up and hire a lawyer who is going to take it to trial and not roll you and force you to take a deal after three years. By the time the client gets to me he/she has been fleeced by lawyers and agencies and audits of the loan. The lawyer also should refuse to sign confidentiality – the fact that anyone would agree to anything with this bank is outrageous and selling out the client and the pain that they have been through.

    The plan is simple – stop you from getting to trial; dismiss them out early on hope no one picks it up during SOL; claim res judicata if someone asks. Then delay trial; give hope to client in order to delay; shame them at depo and at settlement; get judge to tell them they don’t have a case; then hope you can scare them at trial; hope for some technical error; blame the lawyer; rewrite what happened at trial for those who were not there; ask for reconsideration and then write a big check after you get a bunch of lawyers to take alot of money and bury the case. Don’t pay the one advocate who has been a thorn in b of a’s side – put her out of business. And if your lucky – you get a judge that hates the lawyer more than the bank.

    As an attorney – a trial attorney i am thinking long and hard about what is the best way for clients to be made whole. The banks are set up not to resolve these before we file (bank ques can’t correct errors) until trial or realize that they are going to face a jury. But in California- both judge and jury verdicts are being compromised. In Sundquist Judge Klein lowballed the emotional damages too 28k for the wife for 7 + yrs. This was planned behavior by bank – and their lawyers were brought in to over it up before the outside lawyers tried their spin on it. In another case a jury verdict (although facts may not have been laid out properly ) a judge cut a 17 million jury verdict to 130k (?) – it went up on appeal and the decision was up held. If judge’s (many came form firms representing banks or large corporations) are going to benefit the bank at every turn – protect them from published opinions; turn on the advocates who are trying to get these to trial with limited resources and funds – and then write i their opinion that which the bank tells them to write – then where do we get help for consumers. If you settle with bank you undermine value; if you take it to trial it will be 4 yrs at minimum – and then it will go up on appeal for 3 yrs. But if you don’t do that – this will never change.

    Our hope is to file a large number of cases at once. We currently have thirty – and many more have been evaluated. This is a nation wide problem needed a nationwide solution. Don’t give up your trial date it is the one thing they actually fear and have no experience with b/c none of these lawyers regularly try cases. More to be said. . . .

  7. So, how many cases settled? Restitution, or prostitution?

  8. We filed writ of mandamus in first court of appeal in Houston, for judge abuse of discretion and fraud upon the court for Deutsche Bank blablabla Trustee of Long Beach blablabla 2006WL1, this case now is pending bc the bankruptcy case, no lawyers can take thins case, we have evidentiary hearing at bankruptcy court on Dec 1, 2017, someone send your comments please

  9. Reblogged this on California freelance paralegal and commented:
    Excellent blog post. The absolute truth of this blog post is shown clearly by the fact that Bank of America is offering the Sundquists a reported $6 million dollars to agree to ask the Judge to revoke the decision so that it cannot be cited as legal precedent in other cases to understand the

  10. I won my case 3 yrs ago and all we got were attorney fees ( which took 2 yrs). My attorney should have asked at least for Mtg to be satisfied on public record. Now Ocwen is sniffing around again.

  11. And, this is far more complex that any court can understand. It is decades of bad economic policy that has gone haywire — unable to be corrected. But, homeowners should not be the scapegoats. Wrong. Very wrong for this to have happened.

  12. People want to save their homes. They are not looking for millions. Most can’t get anywhere near a “settlement.” MODIFICATION? Not unless you know WHO the modification is with — and, likely, you do not. Unless you know WHO owns the loan, a modification only prolongs the agony of not knowing WHO you are paying. But, modification may be necessary to save the home. Thus, stuck in a system where the fraud does not quit. Whose fault is this? Where were the investigations? What has the public not been told? Much.

    Judges rely on what the government did. THOSE SETTLEMENTS- which did nothing. Nothing for the homeowners. Settlements which left if up to the homeowners, alone, to battle the fraud. STUCK. But, why the courts? Neil is right on that. Decisions have not been good. Banks do not want decisions in homeowners’ favor. And, that is what we have had for years.

  13. My demands for settlement have been lame and the bank hasn’t flinched when they claim “we admit no wrongdoing”. If I had an attorney I’m sure I would get more traction. All the documents support claims that the bank engaged in systematic wrongdoing to deny a HAMP and add $39,000 of fees and excessive interest to a $67,000 default mortgage with $73k of equity”. It’s racketeering in federal court but I’m in state court and this has been going on for nine years. Summary digest was denied and a blue chip lawfirm hired by Wells Fargo withdrew. I’m in limbo by motioning to enforce Rule 114. The most I could get on that is final entry to deny foreclosure. Damages? I need an attorney to help out here in Illinois
    Please email me if my case is something you can handle.

  14. How is the new statement from AG Sessions going to affect older and newer cases since his statement says the judges must follow the law and the Constitution. Can the older cases be contested that the judge did not follow the law? In Colorado, there is a thing called Rule 120 that is not Constitutional since it removes due process of law, how about those cases and the Rule 120?

  15. If the time comes when the crooks do offer a massive amount of money to “shut up and go away” there are a boatload of considerations to weigh. The opportunity to enforce existing law and provide defenses to the fraud committed upon thousands of homeowners statewide will hang in the balance.

  16. Neil thank you for this very timely subject!:

    ” “SETTLEMENT NEGOTIATIONS: WHEN THE HOMEOWNER WINS IN LITIGATION, in every case the banks pay amazing amounts of money to the homeowner (and their lawyer) in order to get agreement on sweeping the case under the rug. Homeowners and their lawyers must realize that the settlement value of their case may be worth 1000 times the judgment value of the case.

    This asymmetry in settlement negotiations escapes most but not all winning homeowners. It gets especially urgent when the banks made the wrong decision and appealed an unfavorable decision only to find that they not only lost one case, but many thousands as a result of that one case” ”

    You are right as usual in my opinion. Thanks to consultations with you and listening to you and Charles Marshall on your blogtalkradio show, I happen to be doing just what you write about today in Colorado.

    With a current quiet title only cases with no damages in discovery > but with proven next move of a 2nd lawsuit filed for $6 million damages – but then voluntarily withdrawn temporarily – unless Chase fully settles at mediation 11-27-2017 or soon after…..

  17. What is the latest on Sundquist? Judge Christopher Klein has tried so hard to keep that opinion published.

  18. I couldn’t agree more… Hit them hard.

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