Challenging a mortgage is serious. Improper actions can result in:
- Foreclosure and loss of your home
- Damaged credit
- Court sanctions for frivolous filings
- Potential criminal liability if done improperly
Consider professional legal counsel before taking action. This path is about understanding and documentation — not reckless confrontation.
The Core Reframe
Before we get into steps, understand what actually happened:
"The bank lent you $300,000. You owe them that money plus interest. Pay or lose your house."
You created a $300,000 negotiable instrument (your promissory note). The bank monetized YOUR creation. They gave you access to what YOU created. Then claimed you "owe" them.
"What consideration did the bank provide for your promissory note?"
If the bank created the "loan" from your promissory note — rather than lending pre-existing funds — the consideration question becomes relevant to contract validity.
Before: "I'm a borrower who owes money and might be a deadbeat if I don't pay."
After: "I'm a creator of value seeking documentation of what consideration the bank provided. I'm asking reasonable questions about the validity of the claimed contract."
Two Kinds of Arguments
Lack of consideration. Promissory note as payment. Money creation mechanics. These help you SEE clearly — but courts usually reject them.
Standing challenges. Chain of title issues. RESPA/TILA violations. Robo-signing. These are what typically WIN in practical situations.
Use understanding arguments to establish your position and negotiate from knowledge. Use strategic arguments when you need practical wins.
Phase 1: Information Gathering
- Original loan application
- Promissory note (get a copy if you don't have it)
- Deed of trust / mortgage document
- Closing documents (HUD-1 or Closing Disclosure)
- All correspondence from lender/servicer
- Complete payment history
- Current statements
Under RESPA (12 USC 2605), servicers must respond within 30 days. Request:
- Complete payment history from origination
- All documents related to loan origination
- Proof of current ownership of the promissory note
- Complete chain of title for the note
- All assignments of the mortgage/deed of trust
- Documentation of any securitization
- Pooling and servicing agreement if securitized
Send via certified mail, return receipt requested. Keep copies of everything.
To relevant government agencies:
- Federal Reserve (discount window activity related to your note)
- OCC (if national bank)
- FDIC (if FDIC insured)
- CFPB (any complaints/investigations)
- SEC (if loan was securitized)
Phase 2: Establishing Your Position
A sworn statement of your position, notarized. Include:
- Facts of the transaction as you understand them
- Your understanding that promissory notes are negotiable instruments
- Your position that your note provided consideration
- Questions about what consideration the bank provided
- Reservation of all rights without prejudice
Send to bank CEO and board requesting proof of:
- Lawful consideration from their institution
- Documentation of pre-existing funds lent
- Evidence they suffered detriment or loss
- Source of funds used in the transaction
Give 30-day cure period. Send certified to CEO and each board member individually.
Sending to the CEO and board members personally puts individuals on notice. Corporate protection may not apply to individual knowledge of fraud. This creates a paper trail showing specific people were informed.
Phase 3: Escalation (If No Adequate Response)
Document their failure to:
- Prove lawful consideration
- Produce requested documents
- Respond within required timeframes
- Comply with RESPA requirements
File simultaneously with:
- CFPB (consumerfinance.gov) — Attach all documentation
- State Banking Commissioner — Request formal investigation
- State Attorney General — Consumer protection division
- OCC (if national bank) — Complaint against charter
FBI, DOJ, and US Attorney complaints are options but carry higher risk of being seen as frivolous if not extremely well-documented. Only consider if you have strong evidence of actual fraud, not merely disagreement about consideration theory.
Phase 4: Protective Measures
- Keep certified mail receipts for every letter sent
- Create phone logs (date, time, person, content)
- Record calls if legal in your state (check consent laws)
- Screenshot all online account activity
- Backup everything in at least 3 places
- Organize chronologically
- Lis Pendens — Notice of pending litigation (file at county recorder)
- Injunction Request — Ask court to stop foreclosure pending resolution
- Bankruptcy — Creates automatic stay (emergency measure)
- Legal Counsel — Get professional help immediately
Do not wait until the last minute. Foreclosure timelines are strict.
What Works in Court
- Standing — Can they prove they hold and can enforce the note?
- Chain of Title — Are all assignments proper and complete?
- RESPA Violations — Did they respond to your QWR properly?
- TILA Violations — Were all disclosures proper at origination?
- Robo-signing — Were documents fraudulently executed?
- Lack of consideration — Courts generally accept credit extension as consideration
- Promissory note as payment — Courts typically reject this
- Money creation theory — Often dismissed as "sovereign citizen"
These provide understanding and negotiation leverage, not court wins.
Signs of Progress
- Bank can't answer consideration demand
- They offer modification unprompted
- Collection activity goes silent
- Regulatory agency opens investigation
- Principal reduction offered
- Foreclosure quietly dismissed
- Promissory note returned marked "PAID"
- Clear title issued in your name
- Favorable settlement agreement
- Restitution of payments made
- Significant loan modification
The Templates
Document templates for each phase are available in the Templates section:
- Phase 1: Discovery — QWR, FOIA requests, debt validation
- Phase 2: Challenge — Notices, affidavits, position statements
- Phase 3: Court — Motion to dismiss, quiet title, counterclaims
- Phase 4: Complaints — Regulatory and criminal complaint formats
Related Reading
- The Money Magic Trick — How banks actually create money
- Your Note = Their Note — Why your signature has value
- The Consideration Paradox — The legal vulnerability