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"We Thought We Were Getting A Loan"
A letter to a friend:
Dear (name deleted)
I’ve recovered my composure, but I’m still
dazed. A friend called me to ask if my wife and I had a conventional mortgage
and if we did, did we realize that we were being badly misled? That’s a serious
charge and I didn’t understand, so he explained that our lender used the
promissory note we signed at closing to pay off the former property owner, never
loaned us money out of his own pocket, did not tell us, and still requires
monthly payments!
But, I protested, how can he do that? We’ve
paid more than $140,000 so far, keeping our agreement at the risk of default and
foreclosure. And wasn’t he taking a big risk with us for 30 years by lending us
the purchase price of our home? No, he wasn’t, isn’t, and never will be.
Little did I know that the lender deposited
our note in an account just like cash, and listed it as a new asset. He then
obtained credit from the Federal Reserve with this asset, expanded that money
anywhere from 30 OR MORE times, used some of the money to pay off the previous
property owner, and kept the rest. He never loaned us a dime! In fact, we
loaned him money and he literally carries our promissory note on his books as a
liability, just as if we had deposited cash in his account that he would then be
obliged to give back to us if we demanded it. We literally paid for our house
on the spot with that promissory note, but we’re paying again, over 30 years,
for the same house! This is crazy, I said! I thought we were getting a loan.
But, I protested, how can he do that? We’ve
paid more than $140,000 so far, keeping our agreement at the risk of default and
foreclosure. And wasn’t he taking a big risk with us for 30 years by lending us
the purchase price of our home? No, he wasn’t, isn’t, and never will be.
In fact it was an exchange. Value for
value. Our note for the house. No loan that passes the “sniff test” was
made to us at any time.
In an honest loan agreement, the lender’s
supply of money would shrink by the amount that he loaned us. He’d be earning
his profit (interest) by risking money that was really his. In our case, the
lender’s pool of money exploded when he took advantage of his status as a
Federal Reserve lender and created money out of thin air with our note. If a
private lender tried this, it’d be counterfeiting and he’d end up in the
slammer.
It’s called fractional reserve banking and all
lenders who are part of the Federal Reserve System do the same thing. Only they
don’t tell you what they do with your note, and that’s dishonest. Why? Because
by law, if the actions of either party to an agreement significantly alter the
cost or risk as originally represented, he is obligated to inform the other
party. Lenders NEVER tell “borrowers” that their promissory notes are instant
cash cows, that they use your note to fund your own loan, or that they incur
little risk. But you still pay a second time, month after month, year after
year for something you’ve already paid for with that note!
The lender is NOT telling you that:
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He’s funding the purchase of the property with your promissory
note and that no money comes out of his pocket to do that.
-
He does not incur nearly the risk he says he does.
-
Your note is a negotiable instrument, redeemable in cash for
up to nine times the face value of your note, exponentially increasing his
profit potential.
-
And if you understood what your lender did with your note and
you had a law dictionary, you’d realize what your Deed of Trust or Mortgage
really says, which is that……
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Your lender accepted your Promissory Note as payment in full
for the property.
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You enter the Deed of Trust or Mortgage agreement after
signing the Promissory Note as the sole owner of that “Fee Simple” property,
paid for in full by your signature on the note, and then you sign it away as
collateral for the privilege of paying again, paying this “trickster”
principal and interest for the next 30 years.
Whereas, silly us,
-
We thought we were taking out a loan.
-
We had to qualify for the loan, establish ourselves as a
worthy risk.
-
We had to jump through hoops to provide all the documentation
– tax statements, banking references, income statements, cash balances,
investments, other “loans”.
-
We felt so grateful to the lender for making it possible for
us to have a home.
-
We sweated the possibility of foreclosure, loss of our home
and our credit rating.
-
We’ve made every payment on time, over $140,000 so far, with
22 years of payments to go.
Have we
kept our side of the bargain? You bet we have. I even feel like we should keep
paying because I’m old fashioned and my granddaddy told me you don’t get
something for nothing. Well, did we get something for nothing? No, but the
lender did! Were we tricked? Yes we were.
The lender created the money to purchase
our home from the previous owner out of thin air with our promissory note,
expanded it up to nine times, invested this free money to get free interest,
never paid taxes on this extra money he created, then held hostage the title
to our home that he didn’t pay for while he began collecting 2 ½ times the
original purchase price from us one month at a time for 30 years!
We gave that lender enormous value, value
far exceeding the purchase price of the home we live in. But, like millions
of other homeowners, we couldn’t see behind the curtain that was drawn when
we handed over the promissory note. We didn’t know how banking works. We
didn’t understand what constitutes value in our system these days, and the
lender never told us. Why would he? If he had, we’d have demanded a darn
good reason why we were going to have to pay him more than $500,000 over 30
years, for a house that we had already paid for, not to mention the
liberties he took with our note by expanding its value without our
permission.
We’re doing something about it, and you
can too. We’ve submitted our documents to a very professional company that
for a fee can satisfy the outstanding balance on our mortgage legally,
safely, and permanently. No more mortgage payments ever again in as little
as 6 WEEKS TO 7 WEEKS
Your friend, (Name deleted)
A
Quick Summary Of How a Loan Works.
1) You want a loan for your
home.
2) The bank advertises that they loan money.
3) You "apply" for a "loan."
4) They put you through the ringer getting you approved for the loan.
5) The bank cannot loan you their own assets, other depositors funds or
their own credit.
6) They have you sign a promissory note.
The
next 4 steps the Bank does not want you to know...
7) Your "signed" promissory note can be sold for money, it's an asset. This
is explained further in our "Library" section.
8) The bank deposits the asset into an account for approximately the amount
of the note.
9) The bank cuts you a check from the deposit you never knew about (or
transfers the money to those who should be receiving it).
10) You think you owe money back on a loan, when in fact, all that was made
was an exchange
Interesting Banking Facts....
1) Money is created today by
"lending," so all money today is born as "debt money."
2) The person who wants a loan must provide the bank something that he or
she doesn't know is valuable, called a "signed" promissory note.
3) The "signed" promissory note is a bank asset that is "expanded" to create
as much as nine times its value. 4) This "expanded" bank asset is what
provides the bank with the value to be able to pay off the former owner,
"lend" you the purchase price, and finally, earn interest by making loans to
others, tax free.
5) All the while, making you, and millions of others, believe that a debt
exits.
Let's Review The Brillance Of This Scheme
If you think about it, the
bankers' scheme is really quite brilliant.
What other business in the
whole world allows you to create money based on the value that someone else
gives you, then charge that person again over and over again... plus
interest?
So
the real question becomes...
"If the promissory note is an asset, what funded the bank's ownership of
the note?"
Answer: They still don't really own it.... they made an exchange.
Your promissory note (asset
to the bank) was exchanged for approximately the amount of the loan. You
gave the bank an asset worth $100,000 and the bank returned $100,000 to you.
Where was the loan?
There wasn't one. But you really do have to admit,
it's brilliant.
Listen, we're not the first
people to "discover" this was going on. But we have figured out some things
that no one else has!
As an honest, ethical person
who believes that all loans should be repaid, do you agree that the bank
should repay your loan to them? After all, they deposited your promissory
note. Your promissory note is an asset that they exchanged for a check.
Where's the loan?
Factually, there isn't one.
And, since all lenders should be repaid, shouldn't the bank repay your loan
to them? If so, you wouldn't have the
"debt" and would live better.
Quickly, when you deposit
money in your checking account, does the bank now owe you that money when
you want it?
Yes.
The bank has a new asset,
the $100 you deposited into your checking account.
The bank also has a new matching liability
that says the bank owes you $100.
Assets = Liabilities.
The bookkeeping entries are
nearly identical for a deposit into your checking account and for a new
loan. By lending, the banks now have more assets and liabilities.
If you were to lend me $500,
your "pool of money" would be smaller. When a bank "loans" money, their
"pool of money" increases.
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