This allows banks to enter into fraudulent contracts where the debtor is assuming that they’re borrowing money of depositors and paying interest to the bank for that privilege.  The bank has no “consideration” over the amount loaned out.  The new loan credit does not belong to them, and it does not belong to any of their customers.

If the debtor does not make their loan payments then the bank will take any assets that secured the loan.  The bank also charges the debtor interest on a loan that was simply created – gaining dishonest usury.

It gets worse when we deal with the issue of mortgage loans….much worse.

What happens when someone takes out a mortgage loan?

It used to be that a bank would loan the money (albeit fraudulently and dishonestly) and keep the mortgage note (promissory note) as their asset.  They would provide servicing on the loan for the full term.

Things don’t work that way anymore.  Here’s the current typical scenario:

John and Jane Doe want to take out a $180K mortgage loan to buy a house.  “Sam” had come into the bank a few days earlier and deposited $20K into his account.  The bank keeps Sam’s $20K in its Reserve account and now has the ability to loan out $180K of new money.

The Doe’s sit down in the comfortable chairs of the bank loan officer.  He smiles at them and gives them a reassuring nod as they sign their names onto a 30-year promissory note at 5.25% APR.  Their signature on that promissory note is what gives the bank the ability to create brand new credit (money).

The bank now sets up a loan account for the Doe’s as an asset.  They type in 180K at their keyboard.  Then they create a demand deposit account for the Doe’s on the liability side of their balance sheet, also typing in 180K.

Presto!  The Doe’s now have a fully funded 180K mortgage loan that is made up of entirely new money.  Their monthly mortgage payment will be $993.97.  They will pay $177,829.20 of interest over the 30 years, on money that was created from nothing.

Here’s where it gets worse.  The bank will sell the Doe’s mortgage to another institution.  That institution will take the Doe’s mortgage and combine it with a whole bunch of other mortgages that are similar to the Doe’s.  They will create a big pile of mortgages.

Then the institution will slice and dice the pile of mortgages up into smaller piles, known as “tranches”.  They will “securitize” the loans.  They will become known as “Mortgage-backed securities”.  These securities will be sold off to investors.

Investors will receive a possible higher rate of return for the more poorly rated tranches (higher risk), while receiving a possible lower rate of return for the more stable tranches (lower risk).

Here’s the bottom line.  The promissory note that the Doe’s signed DOESN’T EVEN EXIST AT THIS POINT!  Their particular loan might be partially owned by 100 different investors as part of a larger tranche.

This brings up an interesting question.  Who do the Doe’s send their monthly mortgage payment to?  The answer is that they will send it to a “loan servicer”, who most mortgage holders think actually now owns their note.  Nothing could be further from the true.

Mortgage-backed Securities

The banking industry created an organization known as “MERS” (Mortgage Electronic Registration Systems).  You can read all about them here: http://www.mersinc.org.

How can you find out if your home mortgage has been sliced and diced and sold off to the investment community as a securitized debt instrument?

MERS provides a search page for just that purpose: https://www.mers-servicerid.org/sis/.  You will be presented with a screen that looks like this:



I would suggest first trying to do “Search by Property Address Only”.  That will give you this screen:



Enter your street number, just the name of your street (leave out direction and street type), the city, state, and zip code.  Then click on the “Expanded Street Search” check box.

After what seems like an eternity the search results will come back.  See if your home is listed as “Active” with a service provider.  (For example, ours is Wells Fargo)

If you don’t see your house listed then I would recommend trying the “Search by Borrower Name, SSN, and Property Zip Code”.  Yes, you will need to give your SSN, but it is a much more accurate search and they probably already have your SSN anyways.

Conclusion

There are many people that are currently being foreclosed on that don’t understand the games being played.  I truly believe that we as Christians need to honor the debts that we owe.  If I sign a “promissory note” to pay somebody “x” number of dollars for “y” length of time at “z” interest then I should seek to do so.

However, when the loan provider (who has already proven themselves to act fraudulently and without due “consideration”) sells off my loan to somebody else, and then that entity puts the mortgage note through the slicer and dicer to securitize my loan into unknown tranches which get sold to an unknown total of investors then how am I supposed to know who I’m paying?

Furthermore, what right would Wells Fargo have (in my case) to ever initiate foreclosure proceedings against me?  They don’t own the note.  They’re not the one that I even owe the money to.  They’re just a servicer of a securitized pile of mortgages.

People that are being foreclosed on should first seek to honor their debt.  If they simply don’t have the money and the foreclosure proceeding happens anyway then they need to DEMAND that the original mortgage note be presented.  You cannot be, and should not be, held legally liable for a contract that cannot be presented.

If you know who your lender and/or lenders are then you need to seek to remunerate them.  If your loan is just now “hash” out in the securitized world of finance then that could prove to be very difficult.

Hopefully, people can now see how evil our banking system truly is.  This should also prove how enslaved we have all become through the propaganda that we have been taught and our own pacifism as our nation gets destroyed.

Comments or questions?  brhamill@hamill.com

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