Man Dares Bank To Foreclose Unless They Reverse Bad Fees, Wins

About a month ago we brought you the story of a man who was willing to risk his house going into foreclosure unless the bank refunded a $25 fee it had wrongfully charged. He crossed his arms and stopped paying his mortgage. Fees mounted. The bank ignored his letters. His house was scheduled for foreclosure. It was the ultimate in real estate brinkmanship. Now, four days before the auction, the bank has blinked.

Our reader writes:

As I predicted might happen, they waited until the last minute. This past Friday, four business days before the auction, they contacted me and agreed to waive the late fees, attorney fees, and all other fees that I requested be waived and promised to reinstate the mortgage and cancel the foreclosure if I paid them the past payments that I promised I would.

He added:

Banks like this one are completely unwilling to work with customers and demonstrate no interest in trying to help homeowners save their home even when they could afford it…

…I took the actions I did with the bank not just for the sake of principle, but also because the bank had far more to lose than me if they foreclosed. It was either they took a loss amounting to tens of thousands of dollars in foreclosure or credited me what I asked so we could move on and they could get paid.

Even if the bank had gone ahead with the foreclosure, our reader was planning to buy it himself at auction, which would have meant that he would own his home outright and at a substantial discount.

I and other readers were highly skeptical of his plans, but it looks like standing up for what is right still works in this country.

PREVIOUSLY: Man Lets House Go Into Foreclosure Over $25 Fee

Comments

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  1. qwickone says:

    Personally, I just would not have let it get that far. There was too much at stake. It didn’t pass the “Is the juice worth the squeeze?” test.

    • Damocles57 says:

      Clearly he believes in acting on his principles where some people are willing to let them slide when pressed.

    • Trick says:

      If you were living paycheck to paycheck and barely squeaking by, this would have been a bad gamble. But it appears he was prepared to purchase the house at auction…

      Being in a position to counter the bank makes this type of gamble for reasonable…

    • spamtasticus says:

      I think he did a great thing here. You must stand up for what you believe in, no matter how inconvenient it may be.

    • humbajoe says:

      and that’s why you’ll always be too afraid to do anything useful in your life.

  2. Blueskylaw says:

    I applaud his audacity, though I probably would have taken them to court. The stress level would not make this action plausible for me.

    • The cake is a lie! says:

      I don’t think he had any stress. He clearly has plenty of money if he was prepared to buy his house at the auction. This isn’t a case of someone with no money not being able to pay the mortgage.

    • sonneillon says:

      You know what I also applaud the audacity and just ludicrous behavior.

  3. Loias supports harsher punishments against corporations says:

    Kudos – that’s pretty damn ballsy.

  4. obits3 says:

    Wow, I think he wins that ballsiest man of the year award. That is way more risk than I would have taken over $25, but to each his own.

    • Loias supports harsher punishments against corporations says:

      The only thing that would make me willing to do this is the fact that in the interim he’s living there rent-free. If the bank never blinked and he lost, he would still have all that mortgage payments saved up.

      • Firethorn says:

        He’s obviously got some cash waiting around if he’s got the resources to probably buy his house back at auction.

        … Is that even legal? My guess is that he lives in a state which doesn’t allow any asset seizure for secured loans beyond the security, and that nobody has really thought about the implications of a market downturn and strategic defaults so there’s no provisions in the laws forbidding him from bidding on his own forclosed house.

    • ssevern says:

      I don’t see the risk as being that great. He owes more than the house is worth. if they foreclose he will not be upside-down anymore.

  5. Hi_Hello says:

    awesome!

  6. speedwell (propagandist and secular snarkist) says:

    This guy is a hero, and his actions partook of the first necessary property of heroism… he didn’t think through the full consequences to himself, and he probably shouldn’t have done it, but others benefited from his (potential) sacrifice.

    • speedwell (propagandist and secular snarkist) says:

      Or potentially benefited, when the banks start to wonder who else is going to stand their ground and refuse to go quietly.

  7. LadyTL says:

    Maybe banks are finally noticing that they lose more money on some of these foreclosures than they would by working with the homeowner.

  8. JakeChance says:

    Veryyyyy ballsy and I can’t imaging a lot of people would do this. I’m glad it worked out for him and only hope that banks will become more human and work with people rather than letting this happen again. I should also wish for a pony that poops rainbows while I’m at it right?

  9. Skellbasher says:

    Balls of steel. Stupid, but balls of steel.

    This guy had much more to lose than the bank.

    1. His home.
    2. A foreclosure appearing on his credit report for 7 years, and making it very difficult to get another mortgage without paying through the nose, if they’d give him one at all.

    OR

    1. $25

    I know what I’d chose. Sometimes standing up for principal isn’t smart.

    • ludwigk says:

      At the same time though, how rational is it for a BANK to risk $10,000+ over a questionable $25 fee? Banks only exist to push paper around and make money. Hell, every step of this process cost the bank $25/hr. Each time a lawyer had to get involved would have been 10-20x that. This whole debacle represents a systemic management problem that permeates at LEAST 3 branches of the bank’s operations (probably their entire operation). Their customer service branch is incompetent, their home finance group is incompetent, and their foreclosure division is incompetent. Further, each branch is incompetent at communicating with each other.

      • SonicPhoenix says:

        You forgot their legal department.

      • Trick says:

        I don’t recall if the name of the bank was mentioned… but it was probably a large bank that took a taxpayer funded bailout and believes that whatever it does is unquestionable. They are Big Bank and they do what they want until they screw up so bad they need to be rescued.

        I am surprised the bank didn’t just go through with it, loss and all. The arrogance we see from the banking industry leads me to think the bank made a mistake by not foreclosing, losing a lot of money and all…

      • Tom Foolery says:

        Except that it wasn’t over the fee, it was over non-payment of his mortgage. You can make your monthly mortgage payment but refuse to pay any outstanding fees. The banks can’t charge interest on those fees, or fees on the fees. There are less melodramatic ways of disputing a fee.

    • TheGreySpectre says:

      If he has the money that he doesnt have to worry about his credit that much then he really doesnt have much to lose as he was planning on buying his house back if it went to auction anyways.

    • peebozi says:

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      • memphis9 says:

        Actually, I think just that this guy had the cash to bid and buy his foreclosed house outright makes his story an exceptional one, and he would not have had much to lose. If you are young/healthy, working, and own a home outright, you may be able to weather the cost to your credit report pretty well, plus my gut tells me that he probably had paid or good informal legal advice that he could make this a pretty rocky road for the bank, litigate for some kind of bank malfeasance if he had better documentation than they did, or what have you.

  10. tedyc03 says:

    This guy is still an idiot for that kind of brinkmanship. Glad he won, but $25 isn’t worth losing your house over, even if it’s $25 you shouldn’t have to pay.

    • flip says:

      wouldnt he need to get a lawyer during these foreclosure precedings?

    • Sian says:

      I get what you’re saying, but on the other hand, he starts fires when he walks.

    • peebozi says:

      Wow, the guy proves that he handled this situation correctly and you still insult him.

      Maybe big pussies, such as yourself, should just sit back and let real men and women deal with the bullies…it’s ok, you sit in the back, safe and out of any harm’s way while the rest of us protect you and your family. no, no, don’t get up, you just sit there behind your daughter and we’ll protect you. seriously, this is too much stress for a little guy like you, you go back to the corner behind the 3 year old girl with the pink hat…do you see her?, yes?, ok then, here’s some coco with whipped cream and a cherry on top, just as you like it.

  11. GuyGuidoEyesSteveDaveâ„¢ says:

    I’m wondering if the bank thought he didn’t have the money to meet their demands. I’m guessing he smartly put the money from the previous “payments” in an account rather than spend it.

  12. Awesome McAwesomeness says:

    Glad he proved his point, but it was a huge risk to take for $25.00. I’m glad he did it, b/c I do understand the principle, but he had a lot to lose over something so small. To him though, it wouldn’t appear that it was small.

  13. mac-phisto says:

    good to hear that he didn’t lose his home, but the ding to his credit for being delinquent on his mortgage for a year will cost him much, MUCH more than $25 in the long run.

    i think a different course of action would have been more prudent.

    • peebozi says:

      Wow, the guy proves that he handled this situation correctly and you still insult him.

      Maybe big pussies, such as yourself, should just sit back and let real men and women deal with the bullies…it’s ok, you sit in the back, safe and out of any harm’s way while the rest of us protect you and your family. no, no, don’t get up, you just sit there behind your daughter and we’ll protect you. seriously, this is too much stress for a little guy like you, you go back to the corner behind the 3 year old girl with the pink hat…do you see her?, yes?, ok then, here’s some coco with whipped cream and a cherry on top, just as you like it.

  14. ca_little says:

    Time is money. The amount of time he’s wasted is WAAAYYY more than $25… unless his time isn’t worth squat…

  15. headhot says:

    Could he have not taken them to court and paid his mortgage through escrow, preventing the bank from attempting a foreclosure for non-payment. This is what renters can do when the land lord is not keeping up their end of the deal.

  16. notovny says:

    Kids, don’t try this at home.

  17. Press1forDialTone says:

    This is just modest reassurance to me that ‘we’ the
    consumers have the power -if we act swiftly, in a
    very large group and have truly been wronged by
    the corporatocracy. I know it is difficult to get enough
    people to bang Maxwell’s silver hammer, but that hammer
    still works in all kinds of industries. The bottom line is
    still the bottom line and will always be the bottom line
    in the corporatocracy (is the is correct spelling of this
    possible non-word?). if there is a possibility of it moving
    in a bad way if a business (small, medium, large, global)
    keeps doing something to people who then have the
    will to ACT, then you’ll see results. The problem is mass
    behavior executed with media assistance.

    • frank64 says:

      You are so right. The banks add many fees just because they can. They can because we let them by paying them and continuing to do business with them I fought a few banks on late fees. One account I cancelled the card, another I canceled the card and emailed them back telling them why, they took the fees down to reinstate the account.

      To me the worst was the increase on CC rates to 30%. Some of these people had good credit. Many posted on boards they decided not to opt out because it was their oldest account. Oldest account? Hello? How much is that going to cost? I thought about it and decided that if it happened to me and they didn’t allow an opt out, I would have refused to pay. I did see postings of people with a Chase account where there was no opt out. If we all did this the banks would not have found it profitable. Even paying the late fee and canceling the account would be enough. Same issue with the NSF fees on checking accounts. Really it is up to us, there needs to be some outrage. I personally wouldn’t have done it with my mortgage, but good for him.

  18. BenChatt says:

    You know I wouldn’t have done this, but I’m REALLY glad someone did. Even if it doesn’t mean banks are growing a soul, there’s at least another folk hero for us plebes.

  19. The Moar You Know says:

    He did the right thing, and everyone here who says something along the lines of “well, ballsy, but it’s not worth the risk” I have only one thing to say:

    You are cowards. Terrified of your government, your banks, your society. Crawl back under your beds.

    People like this are what made America both free and great – remember, our founders laid not just a mortgage and a credit report on the line, but their very lives. This man has something which most Americans don’t anymore…honor.

    • LadyTL says:

      Most americans gave up their honor for cheap trinkets, instant gratification of shallow desires, and petty self-righteousness.

    • Skellbasher says:

      You’re joking, right?

      A guy who could have paid the $25 fee and fought for reversal later, but instead risked his home and future credit is now someone as honorable as our Founding Fathers, who risked their lives to found our nation?

      Somehow I don’t think the two compare.

      • SpamFighterLoy says:

        I don’t think he’s joking and yes, the two compare. Our founding fathers fought with real bullets to defend their right to NOT BE TAXED. Their choice was pay a small tax or risk death. I’m glad they had integrity and courage … obviously most modern Americans don’t.

        • MrEvil says:

          Exactly right, the tax on tea and other items wasn’t that huge, but the fact of the matter was the king levvied that tax against the colonies alone. People back in England didn’t pay the tax. So rather than just roll over and play the cost-benefit analysis game the colonists started a shooting war with their government over a seemingly trivial amount.

      • Tom Foolery says:

        Or alternately, pay the mortgage but not the fee.

    • JennQPublic says:

      You’re an idiot. Assessing the risk-to-reward ratio and determining that you’re not willing to risk your HOME for $25 doesn’t mean you’re terrified of the government, it means you have better things to do with your time than expend a ton of emotional energy fighting a bank that doesn’t give two shits about you.

      Would you tell your parents that if they wouldn’t gamble the slim chance of getting their $25 back against the strong chance they would lose their home, they are cowards?

      I appreciate this guy’s audacity, but I still think it was a stupid risk to take, and his ‘victory’ changes nothing. I hope he felt it was worth it!

    • ames says:

      hahahahahahahahaha

    • obits3 says:

      If you pay the fee, the terrorist win…

    • Gulliver says:

      No, INTELLIGENT people take a cost benefit analysis of things they do. If he spent two hours on this fight (which I bet is way under what the actual was) he now made $12.50 per hour. I put a value on my time. If I could have spent that time with friends, family, resting, or just doing nothing it has value that he has wasted. All for $25, which is clear he ACTUALLY OWED. He did not understand his loan agreement, but now because he thinks HIS interpretation of the contract (not a judges) is the only one that matters, he got $25 waived. This guy has already proven he does not pay bills (he filed for BK). He is a stain on society, not a hero. I hope to hear a story of his house burning down because he bought non-UL tested Xmas lights over the “principle”

      • partofme says:

        If you don’t wire me $25 in the next week, you will soon receive a small claims court summons from my district. I will sue you for $100. You could travel here, spending much more money and time than $100 to fight it, or you can let me get a $100 default judgment against you… or you can wire me $25. What does your cost benefit analysis say now? I’ll be looking forward to seeing your $25. Yay for bullying people with no principles!

  20. 420greg says:

    I hope he got it in writing that they will remove the lates’ from his credit report.

  21. AustinTXProgrammer says:

    Like playing chicken with a blind 800 lb gorilla driving an 18 wheeler… And winning!! I can’t believe it.

  22. AustinTXProgrammer says:

    For everyone that says he had more to loose…

    He apparently had the means to try and bid on his own house at the foreclosure auction. He could have come out way ahead had the bank not blinked.

    He’s still crazy though.

  23. KlueBat says:

    This guy is going to make a mint off book deals and talk show appearances.

  24. blanddragon says:

    If our leaders would stand up like this maybe this action would not seem so strange

  25. CRNewsom says:

    Since the bank was permitted by state law to forclose without a judges signature, how might he get this issue into a courtroom. The reason I ask is because if the bank is in breach of contract, he may not have to pay off the HELOC. IANAL, but it would certainly be an issue for a judge to decide…

    • sirwired says:

      Small claims would have been the appropriate venue to litigate the improper fee. There was no need to play chicken with the bank over a foreclosure.

  26. sirwired says:

    The bank caved because of publicity, that’s all. They would have successfully auctioned the house otherwise.

    Or, you could have taken them to small claims for the fee to begin with (and gotten your costs reimbursed), and you wouldn’t have been on the verge of losing your house (because you almost certainly would have lost)… the fee mixup almost certainly did not entitle the OP to stop paying the mortgage entirely.

    Doing what he did would be like not paying your rent because the landlord is late touching up some paint chips… and with similar results.

    • Firethorn says:

      They would have successfully auctioned the house otherwise.

      With the winner being him in all likliehood, as stated in the article, such an act would have soaked the bank for $$$$$$. Sure, his credit is FUBAR for 7 years, but he’s probably a bit like me if he’s got the money to potentially win an auction for his own house – the house is my only long term debt. I use credit cards, but pay them in full each month. I own my truck and motorcycle free and clear.

      Add in winning the house at auction and paying cash for it, he’s now debt free and doesn’t NEED credit. With the new credit card rules, assuming he has them already, they can’t screw him over too bad.

      This limits the fallout to things like paying a bit more for insurance(what about prior relationship with the insurance company getting him discounts?), and not paying the best interest rates for new lines of credit like a new car loan – if the forclosure is the ONLY thing on his record, he’s still better off than many others, and they still get loans. Take the money he’s NOT paying the bank and invest, and he can buy the car using cash.

      • sirwired says:

        If the house actually sells at auction for the outstanding amount of the loan, then the bank loses little other than the auction fees. Most foreclosures lose the bank massive money because the bid that will be accepted at a foreclosure auction is usually the outstanding loan amount. The bank’s REO (Real Estate Owned) dept. then bids this amount, pays the loan dept., and then attempts to sell the house through a Real Estate agent, a better auction, whatever. The REO process is where the bloodbath happens.

        If somebody actually buys the house at the courthouse auction for the outstanding loan amount (this rarely happens; the auction is usually just a formality so the owner on the deed passes from the original owner to the bank), then the bank doesn’t have to take the loss in REO.

  27. drdom says:

    There are far better ways with less risk attached to make the same point. I still wouldn’t take the banks’ word for anything, and what about any reporting on his credit bureaus? Very high risk game of chicken over a point that could have been settled without the potential adverse effects. Over $25 and a matter of principle that although important, is not worth the adverse consequences that still might incur. Enjoy that glow while you can. I suspect the last shoe hasn’t yet dropped.

    • RvLeshrac says:

      Ahh, yes. Because no one should ever stand up for any of their principles. Ever. We should just allow banks to run roughshod over us and trample what few rights we have left, such as the right to enforce *OUR* terms in the contract.

  28. Anachronism says:

    Sounds to me he got lucky. As I said in the last update on this, it sounded like his case was far from clean cut.

  29. SexCpotatoes says:

    Until the bank sues you or garnishes your wages for the difference between what you owed and what the forclosure sold for.

  30. Gulliver says:

    1. This guy thinks he is more than he is. If the bank foreclosed he would have to pay the full value of the loan. He obviously does not understand the foreclosure process. If he had cash to pay it off, then just do that and keep a balance of $25 and fight over that.
    2. I bet there will be no removal of deragatory credit on his credit report
    3. “I took the actions I did with the bank not just for the sake of principle” no, he did it because he is stupid.
    4. “the bank had far more to lose than me if they foreclosed” Really? The bank can lose maybe a couple hundred 1000 dollars. YOU on the other hand risked your home. YOUR puny house wont make a dent in their portfolio. I bet losing your house WOULD make a huge dent in your net worth.
    5. Unless it has already happened, and he has a signed sealed delivered deal, it means nothing. Is this all in writing? Has he made the payment? A phone call does not constitute a legal real estate transaction.

    • psm321 says:

      > “If the bank foreclosed he would have to pay the full value of the loan.”
      Only true in some states (sorry if you already researched that his state is one of them, I just wanted to point out that isn’t universally true)

      > “I bet losing your house WOULD make a huge dent in your net worth.”
      Not true if he’s underwater on the house

  31. carefree dude says:

    I wish the bank didn’t cave in to his demands, and auctioned his house. Imagine the story… “Man lets his house foreclose over $25… Then buys it at auction for a fraction of what he owed”

  32. Bob Lu says:

    If the house is really under water, he should stop paying for it and let the bank take it anyway. (Assuming his liability of the debt doesn’t go beyond the house. It depends on which state he lives I think.)

  33. MongoAngryMongoSmash says:

    Where does he buy his pants because I want to know where can you find a pair of pants with that much room for his balls. Awesome story.

  34. Blious says:

    His plan worked but was absolutely idiotic and would have failed miserably had it gone to auction

  35. Peggee is deeply offended by impetulant, pernicious little snots disrespecting her and violating her personal space at Best Buy. says:

    I highly doubt he’d have been able to buy the house himself at auction. Unless he could pay cash outright–and most foreclosure sales aren’t exactly pennies on the dollar like Carleton Sheets would have you think–he’d have to apply for a new, you know, mortgage. Who in their right mind would give him a mortgage when he’d let his last go into foreclosure?

  36. sopmodm14 says:

    banks will nickel/dime their customers every chance they get b/c they hold you as a financial hostage

  37. peebozi says:

    I really enjoy reading the jerk-offs on here who still question the guy’s legal move.

    No wonder the thieves in congress keep pulling shit…they know that a large majority of voters are PUSSIES!!!!

    Go ahead and call me out, I’m doing the same thing with corestates/first union/wachovia/wells fargo but it’s over something other than late fees.

  38. Geekybiker says:

    Pretty dumb move, but Bravo none the less.

  39. Robert Nagel says:

    I don’t think he would have gotten the house at a discount. Mortgage companies usually issue a bid for the amount of the mortgage so that whoever buys the house has to pay the mortgage off.

  40. imafuziplatypus says:

    Please post this…

    You cannot buy your own home back at foreclosure. Further more, your relatives and business partners cannot buy your home from foreclosure. Anyone who purchases your home must agree that they are not purchasing the home with the intention of committing this type of fraud.

    I wish he had gone that far, that would have been a good post.

    Also, I would like to see some proof that any of this really happened. Sounds very fanciful to me. Maybe a previously bankrupt individual needing emotional support?