Negotiating with your bank on a failed 2nd mortgage

My wife's hairdresser is hanging in there, generating about half the revenues he once did. He has lost one house he bought to the bank who has repossessed it. He is currently negotiating with the same bank over a second mortgage for $170,000 he took out against his primary home. Of course, that property has gone down in value by more than 30%. He is unable to make payments now against the 2nd-mortgage. So his bank is negotiating with him because, if he files for bankruptcy, the bank will lose the entire $170,000. The bank knows this. So the bank's underbelly is exposed. See, in fractional banking, the bank only puts up a small amount of money. In the $170,000 example above, the bank really only put up about $19,000 of its depositors' money (in reserve) and via 10X fractional banking turned that into the $170,000 that my wife's hairdresser received as a loan using his home as collateral. Banks make money out of thin air. ($19,000 X 10 = $190,000, minus $19,000 kept in reserve = $171,000) So the bank sent my wife's hairdresser a settlement offer. Pay $60,000 and the debt is forgiven. Well, my wife's hairdresser didn't respond, being advised not to reply by his tax accountant. So the bank made another settlement offer for $30,000. Well, it's now a game of chicken. The bank is totally compromised. The hairdresser's tax accountant knows exactly how much real money the bank had in the game (the $19,000). So they expect the bank to come back with another offer for a $15,000 settlement. My friends, I hope you now see how the shell game of banking works and exactly how modern banking represents nothing less than usury.