Don't Take Advice from Banks! It's All Scripted to Get You in Foreclosure and then Default

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Neil F Garfield, February 28, 2013

If you are directly talking to the bank you are talking to people who have been carefully scripted in what they are supposed to say. The goal of the bank is to get you in foreclosure. That is why they tell you that in order to be considered for modification or relief you must stop paying on your mortgage. Then they lead you along in the so-called modification process extending the time you are in default so that it is unlikely that you will have the money to reinstate.

After they are pretty sure you can’t reinstate they tell you your request for permanent modification has been denied and they give crazy reasons like someone didn’t call them back (after they have repeatedly “lost” the documents). In judicial states they file a foreclosure lawsuit. When you call them up and ask what is going on, they tell you your loan modification is denied and they proceeding with foreclosure unless you have the money to reinstate, which includes fees and costs that are probably fabricated. Meanwhile they refuse to provide you with proof they have any right to collect anything from you much less foreclose.

In the judicial states and sometimes even in the non-judicial states the banks encourage homeowners to write “hardship” letters to the Judge. This is a very clever way of getting a lot of people to file a paper with the court that essentially admits all elements of the foreclosure and creates a default situation because you didn’t file a formal answer. The next thing you know a final judgment is entered setting the date for the auction of your property stating the amount due based upon a flimsy affidavit filed by someone with no idea who you are, what the history has been on your file, and what amount is owed to the actual creditor.

In a sense, as pointed out to me by some other lawyers, the banks are practicing law without a license when they give legal advice to borrowers and they have a blatant conflict of interest when doing so. Do NOT follow the advice of the bank representative as he or she is only parroting what they have been told to say. They are all going after foreclosures with the same frenetic energy that went after the loans because if the loans don’t end up in foreclosure they have some questions to answer to the insurers who already paid them (several times over) on the markdown of the value of the pool claiming an interest in your loan.

Here is a simple example: Imagine your call is stolen and your insurance company cuts you a check for the loss. And then another insurance company cuts you a check for the same loss. In real life this doesn’t happen to insured motorists. But in finance the loan insurance works exactly that way. So now you have twice the value of the car that was stolen. Suddenly the police call and tell you the car has been found. If you follow the law, you give back the insurance money and take the car back but that is not what the banks do with your loan. They make sure the car gets buried so they can keep the insurance money which is twice the value of the loan (or ten times the value of the loan). In your case “buried” means foreclosure. It is only through foreclosure that they can demonstrate the claimed loss was real.

Another way they get you is with force placed insurance. They get a “notice” from the carrier that the insurance has lapsed and then contrary to law, without notice to you they get insurance that costs three times what you were paying. This raises the payments to a level you can’t pay and then they give you a notice of default that you failed to make your payment, even though the payment they are demanding is wrong. Then they foreclose, give the same advice over the phone to write a hardship letter to the Judge which admits the debt, note, mortgage and default and then raises the issue of force placed insurance which the average pro se litigant doesn’t really know how to state in a formal pleading. The judge takes the letter to be your answer and with little fanfare enters final judgment for the bank.

Tags: bank advice, credit default swaps, foreclosures, legal advice, loan insurance, modifications
Posted in bubble, Corruption, Eviction, securities fraud |