Mortgage/ loan fraud
People think that banks are good institutions that help them buy a house, car, equipment, finance the projects, and so on. Banks lend money to people and, for providing such a “great” service while taking on “risk,” they charge interest. But in reality, something very different is happening.
The buyer goes to Bank/Credit Union in response to the bank’s claim that it is in the business of lending money in accordance with its corporate charter. The buyer went to the bank believing that Bank had the asset (money) to lend. Bank never tells its costumers the truth that it does not have any money to lend, nor that Bank is not permitted to use their depositor’s money to lend to its borrowers.
Notwithstanding the fact that Magic Bank does not have any money to lend, Magic Bank makes the buyer/borrower sign a mortgage loan application form which is essentially a promissory note saying that the buyer/borrower promises to pay Magic Bank for the money (what money?) which he is supposed to receive from the Magic Bank even before any value or consideration is received by the buyer/borrower from the Magic Bank. This promissory note is a valuable consideration, a receivable and therefore an asset transaction from the buyer to the bank which Magic Bank enters into its own asset account as a cash deposit.
After making sure, that the buyer has the ability to pay required monthly payments {the buyer has credit}, Bank agrees to lend the buyer money to pay the seller. Bank has no money to lend bit it gave the buyer a promise to lend money by way of a commitment letter, loan approval letter, loan authorization, or loan confirmation letter, etc. signed by a bank official or loan/ mortgage officer employed by the Bank.
Bank’s acceptance of the buyer ‘s promissory note makes the bank liable to the buyer/ borrower for the full-face value of the promissory note which is he agreed purchase price of the property, less any cash deposit or down payment money paid by the buyer directly to the seller. It is important to note at this point that all real estate transactions require that the property being sold must be conveyed, by the seller to the buyer, free of all liens encumbrances which means that all liens such as existing mortgage, judgements, etc. must be paid before the property can be mortgaged by the buyer as collateral to the mortgage loan which is yet to be received by the buyer pursuant to the promise to made by Bank. How can the seller pay off his mortgage and obtain clear title if he has not received any money from the buyer. And how can the buyer mortgage a property that does not yet belong to him?
This dilemma is solved using Bank’s magic bag of tricks. Bank, in concert with the bank’s lawyer, or notaries, causes all the liens and encumbrances to magically disappear a Bank check, backed by the buyer’s promissory note and agreement of purchase and sale, deposited into the lawyer’s trust account, to pay the seller for the property at closing. In essence, using the buyer promissory note as the cash to enable the agreement of purchase and sale.
So the buyer’s promissory note made the conveyance possible. Bank caused the property to be conveyed from the seller to the buyer with title free and clear of all encumbrances and liens. The property now belongs to the buyer which makes it possible for the buyer to mortgage his to Bank. The buyer actually paid for the property using his own promissory note.
At this point, the seller has not yet received any money of cash so Bank and its magicians must perform more tricks in order to satisfy the seller’s requirements that he get paid, or the whole deal is null and void. The seller does not even know that the property has been magically conveyed to the buyer’s name in order for the seller to receive any money.
The ensuing magic trick is accomplished this way. The buyer is made to sign another promissory note. The mortgage contract is attached to the promissory note which makes a buyer liable to pay Bank for the money or the loan which the buyer has not yet or may never receive for up to twenty-five years or more depending on the mortgage contract. This note is linked to the collateral through the mortgage contract the mortgage contract as such, it is valuable to Bank.
Bank the goes to Central Bank or to another Bank to pledge the deal that they have just gotten from the buyer credit. The Central Bank then gives Bank the “credit”. Remember, is not Bank’s credit, it is buyer ‘s credit who promised to pay Bank if and when the money is received by the buyer from Bank, payable for up to twenty- five years. or more.
What happened is basically “swap” transactions all banks do to “monetize” security. In this case, the second promissory note that is linked to the mortgage contract and signed by the buyer is a mortgage-backed security.
Bank/Credit Union will then agree to pay Central Bank a certain percentage of interest over the prime. Thus the buyer’s loan package goes to the Central Bank which credits Bank with the full amount of credit which is the total amount of credit which is the total amount of the money that Bank is entitled to receive after twenty five years which is the amount of principal plus all the interest payments the buyer has promised to pay to Bank for twenty-five years or more which is usually three time amount of the money promised by Bank to the buyer. By this, Bank just enriched itself and got paid in advance, without using or risking its own money.
Bank’s lawyer/notary, who holds the check that is backed be the buyer’s original promissory note, then writes a check to the seller as payment for the property.
In effect, the buyer paid the seller with his own money by virtue of the fact that it was the buyer’s own’s money {the promissory note} that made the purchase and sale possible.
What really happened was pure deception, fraud and criminal conversion protected by the “law.” In reality there will be any deal, no purchase and sale agreement because there is no valuable consideration. In order to legalize the transaction, it’s necessary that Bank and their cohorts to make deal happen. It is really a conspiracy of sorts but these “persons” the banks, the lawyers, the land title offices, even court, do not consider the transaction as fraudulent transactions because these transactions happen all the time.
Such a contract is void “ab initio” or void from the beginning. Which means that the contract never took place in the first place. Moreover, the good faith and fair dealing requirements through full disclosure is non- existent which further void the contract.
Bank failed to disclose to the buyer that it will not be giving the buyer any valuable consideration and taking interest back as additional benefit to unjustly enrich the corporation.
Bank led the buyer believe that the money going to the seller would be coming from its own assets account. They lied because they knew, or ought to have known, that their own book or ledger would show that Bank does not have any money to lend and that their records will show that no such loan transaction ever took a place. Their own book will show that there would be no debits from Bank’s asset account at all that would show up are two entries made when the buyer gave Bank the first collateral or the promissory note which enabled Bank to cut a check which made it possible to convey the property from the seller free and clear of all liens or encumbrances as required by the agreement of purchase and sale entered into in writing between the seller and buyer.
In reality, the buyer’s promissory note was used by Bank and its cohorts- lawyers, notary, land title clerks, to convey free title to the buyer from the seller.
The other entry that would show up when we audit Bank’s account , is other pledge of collateral including the buyer’s promissory note which was not converted {unlawfully and without disclosure or permission from the buyer } into a mortgage backed security which was swapped or deposited by Bank to Central Bank for which another deposit was entered into Bank ‘s transaction account.
STANDING COMMITTEE ON BANKING AND COMMERCE — MINUTES OF PROCEEDINGS AND EVIDENCE RESPECTING THE BANK OF CANADA, No. 1: revealed that the chartered banks in Canada create ‘‘money’’/debt instruments from the signatures of their so-called ‘‘borrowers’’, and that there is no reserve of substance, i.e. no gold and no silver to back up the debts created by the flick of a pen by their putative ‘‘borrowers’’.
STANDING COMMITTEE ON BANKING AND COMMERCE — MINUTES OF PROCEEDINGS AND EVIDENCE RESPECTING THE BANK OF CANADA, No. 1.
OTTAWA, J. O. PATENAUDE, I.S.O. PRINTER TO THE KING’S MOST EXCEL LENT MAJESTY, 1939.
LIBRAIRY OF CANADA PARLIAMENT
WITNESSES:
Dr. W. C. Clark, Deputy Minister of Finance
Mr. Graham Ford Towers, Governor of the Bank of Canada
WEDNESDAY, MARCH 8, 1939 and THURSDAY, MARCH 16, 1939.
MEMBERS OF THE COMMITTEE: Mr. W. H. Moore, Chairman and Messieurs Baker, Bercovitch, Cahan, Clark (York-Sunbury), Cleaver, Coldwell, Deachman, Donnelly, Dubuc, Dunning, Euler, Fontaine, Fournier (Hull), Fraser, Harris, Hill, Howard, Hushion, Ilsley, Jaques, Kinley, Kirk, Lacroix (Beauce), Landeryou, Lawson, Leduc, Macdonald (Brantford City), Mackenzie (Vancouver Centre), McGeer, McLarty, McPhee, Mallette, Manion, Martin, Maybank, Mayhew, Perley, Plaxton, Quelch, Raymond, Ross (Middlesex East), Ross (St. Paid’s), Stevens, Thorson, Tucker, Vien, Ward, White, Woods worth—50.
- ARSENAULT, Clerk of the Committee.
McGeer: But there is no question about it that banks create the medium of exchange?
Mr. Towers: That is right. That is what they are for… That is the Banking business, just in the same way that a steel plant makes steel.
The manufacturing process consists of making a pen-and-ink or typewriter entry on a card in a book. That is all.
Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money.
Broadly speaking, all new money comes out of a Bank in the form of loans. As loans are debts, then under the present system all money is debt.
McGeer: When $1,000,000 worth of bonds is presented (by the government) to the bank, a million dollars of new money or the equivalent is created?
Mr. Towers: Yes.
McGeer: Is it a fact that a million dollars of new money is created?
Mr. Towers: That is right.
McGeer: Now, the same thing holds true when the municipality or the province goes to the bank?
Mr. Towers: Or an individual borrower.
McGeer: Or when a private person goes to a bank?
Mr. Towers: Yes.
McGeer: When I borrow $100 from the bank as a private citizen, the bank makes a bookkeeping entry, and there is a $100 increase in the deposits of that bank, in the total deposits of that bank?
Mr. Towers: Yes.
McGeer: Mr. Towers, when you allow the merchant banking system to issue bank deposits which, with the practice of using the cheques as we have it in vogue today, constitutes the medium of exchange upon which I think 95 per cent of our public and private business is transacted, you virtually allow the banks to issue an effective substitute for money, do you not?
Mr. Towers: The bank deposits are actual money in that sense, yes.
McGeer: In that sense they are actual money, but, as a matter of fact, they are not actual money but credit, bookkeeping accounts, which are used as a substitute for money?
Mr. Towers: Yes.
McGeer: Then we authorize the banks to issue a substitute for money?
Mr. Towers: Yes, I think that is a very fair statement of banking.
McGeer: 12 per cent of the money in use in Canada is issued by the Government through the Mint and the Bank of Canada, and 88 per cent is issued by the merchant banks of Canada on the reserves issued by the Bank of Canada?
Mr. Towers: Yes.
McGeer: But if the issue of currency and money is a high prerogative of government, then that high prerogative has been transferred to the extent of 88 per cent from the Government to the merchant banking system?
Mr. Towers: Yes.
McGeer: Will you tell me why a government with power to create money, should give that power away to a private monopoly, and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy?
Mr. Towers: If parliament wants to change the form of operating the banking system, then certainly that is within the power of parliament.
McGeer: So far as war is concerned, to defend the integrity of the nation, there will be no difficulty in raising the means of financing, whatever those requirements may be?
Mr. Towers: The limit of the possibilities depends on men and materials.
McGeer: And where you have an abundance of men and materials, you have no difficulty, under our present banking system, in putting forth the medium of exchange that is necessary to put the men and materials to work in defence of the realm?
Mr. Towers: That is right.
McGeer: Would you admit that anything physically possible and desirable can be made financially possible?
Mr. Towers: Certainly. [Underlining, emboldening & italics added]
Now you know that you have been tricked and it is up to you/us whether you are going to pay all the fictitious debt by your labor, or whether you will challenge the bank/Credit Union about the validity and fairness of the contract.
NN, DB
