WE THOUGHT IT WAS A LOAN
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 by the bank? That’s a serious charge that I didn’t understand, so he explained that our bank lender used the promissory note that we signed at the closing to pay off the former property owner, never loaned us money out of the bank, did not tell us, and then still requires us to make monthly payments!
But, I protested, how can the bank do that? We’ve paid more than $140,000 on our mortgage so far, keeping our agreement to monthly payments because of the banks threatened risk of default and foreclosure. And wasn’t the bank taking a big risk with us for 30 years by lending us the purchase price of our home?
No, the bank wasn’t, isn’t, and never will take any risk.
Little did I know that the bank lender deposited our note in their own bank account just like cash, and listed it on their ledger as a new asset. They then “bought” money from the Federal Reserve with this “asset”, expanded that money by fractional reserve banking anywhere from 2-9 times, used some of the money to pay off the previous property owner, and kept the rest for themselves. The bank never loaned us a dime!
In fact, we loaned the bank money and they literally carry our promissory note on their books as a liability, just as if we had deposited cash in a bank account that they would then be obliged to give back to us when we demanded it. We literally initially paid for our house on the spot with our promissory note, but we are paying the bank again, over 30 years, for the same house!
This is crazy, I thought we were getting a loan.
> In fact it was an exchange.
> Value for value. Our note for the house.
> No bank loan that passes the “sniff test” was made at any time.
In an honest bank loan agreement, the bank lender’s supply of money would shrink by the amount that they loaned out to us. They would be earning their profit (interest) by risking the bank’s own money. In our case, the bank lender’s pool of money expanded when they took advantage of their status as a Federal Reserve lender and they created money out of thin air from our promissory note. If a private non-bank lender tried this, they would be counterfeiting and they would end up in prison.
This scam is called fractional reserve banking and all lenders who are part of the Federal Reserve System do the same thing. Only they are devious and don’t ever tell you what they actually do with your note, and that’s dishonest. Why? Because by law, if the actions of either party to an honest agreement significantly alter the cost or risk as originally represented, they are required to inform the other party.
Bank lenders NEVER tell “borrowers” that their promissory notes are instant cash cows, that the banks use your promissory note to fund your own loan, or that they incur no risk. But you still are required to pay a second time, month after month, year after year for something you have already paid for at the beginning with your promissory note!
The bank lender is NOT telling you that:
• They are funding the complete purchase of the property with your promissory note and that no money comes out of the bank’s own account to do that.
• The bank does not incur any risk that they claim they do.
• Your signed promissory note is a negotiable instrument, redeemable in cash for up to nine times the face value of your note, exponentially increasing the bank’s profit.
• If you understood what your lender actually did with your promissory note and you had a law dictionary to explain the terms, you’d realize what your Deed of Trust or Mortgage really says. That, 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 immediately signed it away to the bank as collateral, only for the privilege of you paying the bank again, paying the “fraudster” principal and interest for the next 30 years.
Whereas, silly YOU,
• YOU thought you were taking out a loan.
• YOU had to qualify for the loan, and prove you were risk worthy.
• YOU had to jump through many hoops to provide all of the required documentation – tax statements, banking references, income statements, cash balances, investments, information on other “loans” you have.
• YOU felt so grateful to the lender for making it possible for you to have a home.
• YOU sweated out the possibility of foreclosure, loss of your home and your credit rating.
• YOU have 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 bank lender created the money to purchase our home out of thin air with our promissory note, expanded its value up to nine times, invested this free money to get free interest, never paid taxes on this extra money they created, then held hostage the title to our home that the bank didn’t pay for while they began collecting 2 1⁄2 times the original purchase price from you – one month at a time for 30 years!
You gave that bank lender enormous value, value far exceeding the purchase price of the home you live in. But, like millions of other homeowners, you couldn’t see behind the curtain that was drawn when you handed over the promissory note. You didn’t know how the banking scam works. You didn’t understand what really constitutes value in the banking system these days, and the bank lender was very careful to never tell you the truth. Why would they? If they had, you would have demanded a damn good reason why you were going to have to pay the bank more than $500,000 over the next 30 years, for a house that you had already paid for, not to mention the liberties the bank took with your note by expanding its value without your permission.
We’re doing something about it, and you can too.
This true story accurately reflects the experience of many people who finally understand the truth about mortgages. Think this over and if you have questions, please go to the contact page and get in touch with us immediately.
We are looking forward to hearing from you soon.
P.S. Tell all your friends. They’ll thank you forever.
P.P.S. Now that you know the truth, how do you feel about writing that monthly check to the bank?