How to Put Leverage Back Into the Hands of Homeowners

You had the ultimate leverage when they needed your signature to start the loan agreement. Now you have the ultimate leverage if you can properly plead and become a credible threat based upon wrongful foreclosure. If a trust is named or implied as mortgagee or beneficiary you are not just threatening the one case of foreclosure filed against you, but all foreclosures initiated in the name of that trust.

Once faced with that threat the rule, contrary to general misconceptions, is that the homeowner will always receive offers of settlement that grant favorable terms. How beneficial? It depends upon the guts and determination of the homeowner and the lawyer for the homeowner.

see Homeowner Reverses Sale to Third Party Bidder Based on Wrongful Foreclosure and Get Modification


See 2019.07.15 – Minute order for MSJ



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The overwhelming majority of lawyers, judges and homeowners believe that they cannot stop a state from allowing the forced sale of the property, even though the the parties who initiate the forced sale are not creditors nor otherwise empowered to to conduct such a sale. Existing statutory and case law shows that is premise is wrong.

Further the existing consensus is that you cannot get a Federal Court to issue injunctions in either nonjudicial or judicial foreclosures. That too is wrong.

The simplest answer to the differentiation between consensus and reality is that not enough people are trying. In the real world of judicial warfare you can always find decisions that support bad applications of law and fact. The fact that this happens is no reason to abandon one’s rights, especially if it involves giving up title to your home and your lifestyle to companies who are merely seeking revenue from destroying your rights and interests.

An additional answer lies in the successful manipulation of news by the investment banks. Since 98% of all foreclosures happen by default (no opposition) banks are able to create the false notion that therefore the foreclosures were all solidly based in fact and law when nobody has ever decided that. By merely putting paper documents in front of judge that at a glance appear to be facially valid, the foreclosure is granted in judicial states and in nonjudicial states the parties initiating foreclosure don’t even need to do that.

Further upon losing cases, the banks almost always reach a settlement with homeowners where the homeowners are paid off to keep silent about their success. This has occurred in tens of thousands of cases that I know about and probably there are many more.

And finally, the banks have succeeded in mastering the psychology of litigation. The first thing they do when confronted by any credible threat in pleading is offer something that is worthless, indicating to the lawyer and the homeowner that their defense must be worthless. Unfortunately, most lawyers and most homeowners give up at his point because they are still trusting in the word of banks that engaged in the largest economic crime in human history. Homeowners hoping for an early end to the nightmare thus reach the false conclusion that any defense is hopeless.

Adding to that is the playbook that insurance companies use. They make it a long and tortuous process to get relief. They use ridicule and anything else at their disposal to delay litigation of your defense and just plain wear you out. That works a lot of the time.

So of all foreclosures initiated in the United States, less than 1/2% are resolved in favor of the homeowner upon reasonable economic terms. In simple numbers that means that a fair result was achieved in about 65,000 cases. In another 350,000+ cases, homeowners were able to hang onto their homes have been able to hang onto their homes on better terms than the original loan agreement. And in another 500,000 cases permanent loan “modifications” occurred wherein homeowners were able to renew payments on a loan agreement that was economically unsound.

For the banks it is “good business.” They get the revenue or cash flow from 98% of all foreclosures and the revenue from “modifications” in which the creditor is still not identified (because the debt has been reduced from actual to theoretical). When they lose they are losing revenue, not suffering any economic loss due to nonpayment.

Of the 65,000 cases reaching a fair result the banks manage to “save” approximately 60% of their revenue from foreclosures by offering deep discounts on loans they do not own. And in only 15,000-20,000 cases were homeowners brave enough and persistent enough to see it through to the end, where they defeated the foreclosure attempt on its merits. Because they had resolved to do that. In all such cases it required a level of perseverance bordering on obsession to get a just result.

Meanwhile in more than 12 million foreclosure cases thus far and climbing, investment banks are walking away with an average of $225,000 per case for a grand total thus far of more than two trillion seven hundred million ($2,700,000,000,000) dollars in revenue upon which they pay no tax because they falsely report it as repayment of debt. This deprived the US government and the economy of more than eight hundred ten billion ($810,000,000,000) dollars in tax revenue.

Why isn’t anyone doing something about that? Simple answer: because the banks control more of our governance than they have ever controlled in the past. The foxes are guarding the henhouse. And if you want to read an exposition of this problem and some methods to address it I strongly recommend reading and studying this plan from Elizabeth Warren whom I have followed with admiration since 2007 before she ever entered politics.

See End-wall-streets-stranglehold-on-our-economy

See the-coming-economic-crash-and-how-to-stop-it

Disclosure: While I do specifically endorse candidates I have donated money to the current and previous campaigns of Senator Warren.


6 Responses

  1. Election campaign rhetoric….when will people see, the majority of presidential hopefuls are liars. The lenders are so deeply ingrained in the system, they have the power to crush an economy. This could stop with regulation and oversight. These corporations are too big, to do anything, but fail. Most of these cats cannot even keep a balance sheet straight. I say this frequently: where is the documentation-contract “we” signed giving these gangsta’s the rights to sell our indebtedness to strangers-investors on the open market. I have not seen any challenges to that contract. Our contracts are with an originator-lender…not with certificate holders, PERIOD! My personal information, is not for their personal and financial gain, then for sale to strangers of the transaction. I owe certificate holders, nothing. The people who sold them them the “promise” do…never asked me …my $.02 on the matter.

  2. […] Source: How to Put Leverage Back Into the Hands of Homeowners […]

  3. I’d vote for Warren if she’d quit tiptoeing around the issue that there is no watchdog – for consumers in these situations – the CFPB lost all its teeth – and did absolutely nothing for people anyhow and she doesn’t mention how she’s going to tackle the foreclosure crisis still alive and kicking people out of their homes – until she says something concrete and with iron fangs – she won’t appeal to those in our ’cause’ – which Harris definitely is not getting my support – she left California down.

    Warren created the CFPB – she needs to take it back and put it into motion the first day if elected and sign an executive order staying all these phony cases and ordering they be investigated – every single one of them – employ people like Neil, etc., to figure out how to fix this mess. And have Yang as Vice President ….

    In 2008 had they simply given each homeowner $100,000 for the sole purpose of paying on a mortgage – the money could have only gone one direction – ‘trickling up’ – the banks would have ended up with taxpayer money anyhow – only directly from the taxpayers and not through muddy waters of congress.

  4. Java — agree. We are fighting a lie.

  5. The Numbers don’t decide. The system is a Lie.

  6. Well I have no leverage – I lost my house after 10yr battle with four different bank servers with no help from LivingLies — everybody wants money money money and really give no assistance so until we all lose our houses!

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