If a Borrowers Promissory Note Funds a Loan Who Is The Creditor?
Los Angeles, CA · Member since 2017 · 7 posts · 7 votes
If a Borrowers Promissory Note Funds a Loan Who Is The Creditor?
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Member since 2019 · 6 posts · 5 votes
6y@Chris Seveney Yes sir. I'm familiar with fractional reserve lending. What we're talking about goes way beyond simple FRL. We're talking about conversion of promissory notes without notifying the signatories that the notes are convertible. A convertible note is a debt security, and by law, a convertible note must state that it is such an instrument. Furthermore, the individuals entering into these agreements believe the transaction to be a loan. But that's far from the truth. It's actually a sale of a securities. The banks are entering borrowers into securities transactions, for the secondary market. It's hard to believe that so many financial professionals don't understand what's going on or why this is such a problem.
And that in itself is the problem. Because all of the financial professionals who have answered this topic are clearly confused, to the point they think it's a joke. But it's not. To them it sounds silly, which only proves that even professionals don't understand it. If they don't get it, how can the borrowers? Nobody no what's going on except the servicers and trustees. To the professionals it seems like nonsense because a loan is straightforward.
One person wants to buy borrower money. Another person lends the money. Borrower signs an I.O.U. promising to pay back that money plus interest. Right? That's simple and straightforward, like it should be. And that's what the professionals and the borrowers both believe is going on. AND THAT'S THE PROBLEM!
When the borrower pay the lender back, the note (I.O.U which is supposed to be the evidence of the debt) should be returned. Because if the lender really lent money, then there's no reason to convert or cash the note. It's supposed to be evidence of the debt. Fractional Reserve Lending has nothing to do with this. Because there is no money being lent. It's not a loan transaction (although the borrower, and clearly all of these professionals, do believe it is). It's really a sale of securities. It's a secondary market transaction disguised as a loan, but IT'S NOT A LOAN.
And that is exactly why the borrower, and clearly a lot of professionals, don't know about it. Because the banks aren't telling anyone. Everybody thinks there's a regular loan happening. THERE'S NOT.
It's EXACTLY why GLASS STEAGALL was implemented. EXACTLY why it was so IMPORTANT. It's EXACTLY why the economy tanked. The Mortgage Securities market is what collapsed the economy. Not regular market transactions. FRAUD! We're talking about the FRAUD in securities market. That's what was responsible for the collapse. Both the Great Depression and 2008. This is why keeping commercial banks separate from investment banks is so important. Glass Steagall is why we there was no economic collapse for over 80 years. But as soon as jack*** Clinton repealed it, the door for the fraud was opened again. And the banks collapsed the economy, AGAIN. He set it into motion.
WaMu was directly involved. They weren't in trouble. The FDIC stepped in to help Chase commit a robbery. Jamie Dimon sent moles to WaMu, and through these pretend loans (which were securities transactions) they destroyed WaMu and the economy. And all the foreclosures were fraud. Not a single bank had legal right to foreclose, because once a promissory note is converted & securitized, it's no longer a NOTE. It can't be converted back. It's no longer a tangible asset. The whole market came down because of this exact thing. There was no lenders. The borrowers weren't borrowers. And the notes were no longer notes.
And on top of not disclosing the true nature of the transactions, the borrowers were unknowingly entered into 3rd party transactions, without knowledge, consent, or recourse. But it gets worse. Because the notes were supposed to make into the REMIC trusts within 90 days. But they never made it at all. Because the banks were reselling them to over seas market investors. Which clouded damn near every title in America. Half the REMIC were empty. The investors got screwed. The home owners got screwed. And the insurance companies got screwed. America got screwed. All by Wall Street. And then we gave the bastard crooks a bailout. Then the banks inflated appraisals, fabricated documents, counterfeited the securities (which is a felony) committed securities fraud and tax evasion. Then contacted borrowers to offer them loan modifications under the false premise of having to be 90 days late (which is exactly how long they need to foreclose), then denied the homeowners their modifications to default them and collect on the insurance and credit default swaps, then after squeezing all they could, stole the properties through the fraudulent foreclosures using the fabricated documents and bid rigging.
And now cities in every state are crying about a giant homeless problem. LOL Well no ****!
35 Replies
- 9yPatti RobertsonBusiness MemberProperty Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
@Izraul Hidashi - Is this a real question or a riddle? LOL! The creditor in this case would be whomever the Promissory Note is owed to - IE - whoever the borrower borrowed the money from to fund the loan.
- Los Angeles, CA · Member since 2017 · 7 posts · 7 votes9y
No. It's a real question. I assume you meant, regardless whether the person named in the note actually lends their own money, it's still owed to them because the agreement is binding.
Thank you for your answer.
But I meant in the instances where the note itself is converted or exchanged for credits and the ledger shows it as an asset, deposited in a Demand Deposit account. I noticed some T accounting shows matching liabilities, so I'm a little confused as to whom the actual lender would be in that instance.
- 9yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Now I am totally confused! the note is converted or exchanged for credits? deposited in a demand deposit account? What am I missing?
- Los Angeles, CA · Member since 2017 · 7 posts · 7 votes9y
Sorry, I guess it's a little difficult for me to describe since I'm not a financial expert familiar with the terminology. The best references I could find would be from the Federal Reserve Banks themselves.
Federal Reserve Bank of Chicago - Points of Interest (p. 6)
Federal Reserve Bank of Chicago - ABCs of Figuring Interest (p. 2)
Federal Reserve Bank of Richmond - The Federal Reserve Today (p. 14)
Federal Reserve Bank of St. Louis - Who We Are and What We Do (p. 8) - Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes9y
In general:
Investor or certificate holder -> underwriter (creates the certificate) -> Depositor (issuing entity) -> Seller (purchases note) -> Originator (or creditor that created the note) -> borrower
- Los Angeles, CA · Member since 2017 · 7 posts · 7 votes9y
Thank you for your answer Mr. Phillips. The more I try to understand the more confusing it gets. Maybe it's the REMIC PSA's causing confusion.
- Los Angeles, CA · Member since 2017 · 7 posts · 7 votes9y
Ok. So on page 6, Modern Money Mechanics: Federal Reserve Bank of Chicago, it explains that banks don't "pay out" the funds for loans from money in other depositor's accounts. That's understood.
Page 19, Two faces of Debt: Federal Reserve Bank of Chicago - "banks exchange a borrower's "promissory note" or "security" for a check that other banks can deposit" (so the note is funding a check) same page states, "...the borrower can spend the deposit acquired by borrowing"... (so in other words, deposits from which bank-loan checks are issued (from the exchanged notes) is what the depositor (borrower) spends).
The only interpretation of what the Federal Reserve Bank (the head bank) is saying, is that "banks credit depositor accounts and lend the deposits". In this type of transaction, there is no investor, only notes. This is the type of transaction I am referring. It's well known that banks do not loan their money, nor are they allowed to loan credit, so who is funding this type of transaction is my question, because something else has to be taking place, otherwise the only logical answer would be cringe worthy.This is the confusion I'm trying to resolve.
The reason I even ask is because I do have a clear understanding of how loans works, or should work. I also have a pretty good grasp on UCC law, which is why the information that the "Bank of Banks" implies is of concern to me, and quite frankly, should be of concern to everyone. Especially and more specifically those working in our financial arenas who are completely confused and oblivious to this type of transaction, because it does in fact occur. And the banks accounting ledgers can confirm that.
So if professionals of the industry can hardly fathom it, then it's slightly terrifying to say the least. Simply because, if it is what it seems, it's far beyond not good. Clearly something is taking place. I'm just hoping someone with actual knowledge of it can provide some information that offers an alternate explanation. One that isn't criminal.
It most certainly deserves the attention. At least I would think it does. - Los Angeles, CA · Member since 2017 · 7 posts · 7 votes8y
All these years later and not a single reply from anyone who knows about it! LOL.
Either people are oblivious to the truth or complicit in keeping it under wraps. Here's what we do know now. I was right about the REMIC frauds. In fact, Chase and several other banks have been slapped with fines for their misconduct relating directly to those issues. Also, Securitization is ********! A scam. A giant ****ing PONZI that collapsed our economy.
And last but not least, the banks will fight tooth and nail when a borrower is seeking a full accounting. They do not want to reveal the money trail (true source of funds). Why? Because that trail will undoubtedly lead back to the alleged borrower. Normally a Promissory Note would just be an I.O.U., and that's what the banks want people to think. Just a worthless piece of paper that validates a promise (legal obligation).
But the signature turns into value. Buying & selling Promissory Notes is a result of the intrinsic value.
In fact, a $300,000 Promissory Note is worth way more than its face value, because of Securitization. Banks & Investors make more than face value on something they get for free. The banks treat it as if the borrowers gift it to them. Then they make a **** load of money on them, and still collect on loans which they never make (plus interest).
Real slimy, sleazy, ********. And no one can say it isn't true. Well...they can, but they would be lying or just plain wrong! Ignorance isn't always bliss.
- Los Angeles, CA · Member since 2017 · 7 posts · 7 votes8y
It is worth mentioning that there are indeed investors. The investors fund the mortgage pools. But the banks pocket that money. Check all the litigation that occurred in the last 5 years. WaMu is a perfect example of the ****ery still going on today. The servicers are thieves. The screwed the investors and the borrowers.
The crimes are so big that SEC and the IRS chose to forgive the unthinkable. Almost every REMIC is in violation of it's tax status. The IRS should have cleaned up on the billions of tax fraud being committed. But instead they bowed down. Unreal!
All the regulators have become useless pawns. They come out every now and then for show and pretend to punish the banks, who pay fines with victim and shareholder money. But since the regulators and banks are both under the same Federal Reserve umbrella, it's akin to taking money from the right pocket and placing it in the left. Billions were paid out in fines for criminal misbehavior and not a single dime went back to any of the victims. Explain that!
- Member since 2019 · 1 post · 0 votes7y
Izraul Hidashi, I believe that you have gone this long with no response because they do not want this info to be released whatsoever. Shortly after finding that my note was separated from the mortgage and sold to Fannie Mae I started doing some digging and came across this very info you're mentioning. I called every bank in my town (9 I believe) and got one financial officer to admit this is exactly how this works. I called asking to exchange a note for a check to which every bank said that's not how that works. I politely informed them that their bookkeeping records and the law state otherwise. Everyone, to no surprise, said I was wrong. The last place I called laughed when I asked the same question. They said, "that is exactly how this works but you won't ever find a bank that will do what you're asking without a security agreement giving us (the bank) lien on the property." I called that person two more times just flabber ghasted that I actually got a banker to admit this info is legitimate with many more questions. Out of respect for this person I apologized for my repeated calls and told them I didn't wish to get them in trouble just needed to talk to someone that had the answers. They stated that they were not a lawyer so they couldn't comment on the legalities of my question and they still worked for the bank so they couldn't give me any more info without losing their job but assured me that I was on the right track, keeping asking these questions and don't stop until you find your answer.
I took that as a blessing in disguise and ran with what little info I had. After all, I got a bank to admit that's how loans are executed proving that our note funds the alleged "loan." that was a huge victory for me. However, now that my note has been securitized and I have the pooling number that it is in, I contacted the servicer and they refuse to answer any questions about this whatsoever. My thoughts are we will never be able to beat the system but if we can get one bank to admit what they do is fraudulent I'm sure we can get more. The more that do the more people will find out and hold them accountable. (so I hope).
I have a whole lot more info regarding my interactions with these institutions and how I've dealt with them if you're interested? I do not wish to divulge that here simply because I don't want the thieves to know how I play my hand. - Member since 2019 · 6 posts · 5 votes7y
Yeah, I know that's exactly how it works. But a lot of bank employees, real estate agents and regular people don't know it or they just don't believe it. It's screwed up how crooked they are. I'll never deal with a bank again. But I've watched a lot of cases carefully & studied enough of the law now to know there are ways to fight it in court. Everything the banks do is for the reason of avoiding liability in case the borrower catches on. Right down to the closing documents that you sign being returned to you in blank. Think about that for a minute. If you enter into a business deal that requires signing contracts, both parties have to sign & you always get copies of those documents. But not with a mortgage transaction. The banks aren't about to sign their names or give you copies that would evidence any alterations or other nonsense. If you look at the majority of foreclosure cases where the Judges make them have to show proof, the banks either got caught forging and/or fabricating the documents or claimed the notes were lost. But the notes can't be lost. If everything is done right they get put into trusts, like they're supposed to. That means they go into a safe within 90 days of closing. Once there, they can't be moved. The problem is that the banks never put them in the trusts. They rip the borrowers & investors off. And there's plenty of regulatory actions & fines that prove it.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes7y
@Izraul Hidashi
Look up fractional lending. Banks are allowed to lend more $ then they have in reserve. It’s not a secret. Then mortgages get collateralized and sold to Fannie or Freddie so they can keep lending and make money from the original fees.
7e investments53 Reviews - Member since 2019 · 6 posts · 5 votes6y
@Chris Seveney Yes sir. I'm familiar with fractional reserve lending. What we're talking about goes way beyond simple FRL. We're talking about conversion of promissory notes without notifying the signatories that the notes are convertible. A convertible note is a debt security, and by law, a convertible note must state that it is such an instrument. Furthermore, the individuals entering into these agreements believe the transaction to be a loan. But that's far from the truth. It's actually a sale of a securities. The banks are entering borrowers into securities transactions, for the secondary market. It's hard to believe that so many financial professionals don't understand what's going on or why this is such a problem.
And that in itself is the problem. Because all of the financial professionals who have answered this topic are clearly confused, to the point they think it's a joke. But it's not. To them it sounds silly, which only proves that even professionals don't understand it. If they don't get it, how can the borrowers? Nobody no what's going on except the servicers and trustees. To the professionals it seems like nonsense because a loan is straightforward.
One person wants to buy borrower money. Another person lends the money. Borrower signs an I.O.U. promising to pay back that money plus interest. Right? That's simple and straightforward, like it should be. And that's what the professionals and the borrowers both believe is going on. AND THAT'S THE PROBLEM!
When the borrower pay the lender back, the note (I.O.U which is supposed to be the evidence of the debt) should be returned. Because if the lender really lent money, then there's no reason to convert or cash the note. It's supposed to be evidence of the debt. Fractional Reserve Lending has nothing to do with this. Because there is no money being lent. It's not a loan transaction (although the borrower, and clearly all of these professionals, do believe it is). It's really a sale of securities. It's a secondary market transaction disguised as a loan, but IT'S NOT A LOAN.
And that is exactly why the borrower, and clearly a lot of professionals, don't know about it. Because the banks aren't telling anyone. Everybody thinks there's a regular loan happening. THERE'S NOT.
It's EXACTLY why GLASS STEAGALL was implemented. EXACTLY why it was so IMPORTANT. It's EXACTLY why the economy tanked. The Mortgage Securities market is what collapsed the economy. Not regular market transactions. FRAUD! We're talking about the FRAUD in securities market. That's what was responsible for the collapse. Both the Great Depression and 2008. This is why keeping commercial banks separate from investment banks is so important. Glass Steagall is why we there was no economic collapse for over 80 years. But as soon as jack*** Clinton repealed it, the door for the fraud was opened again. And the banks collapsed the economy, AGAIN. He set it into motion.
WaMu was directly involved. They weren't in trouble. The FDIC stepped in to help Chase commit a robbery. Jamie Dimon sent moles to WaMu, and through these pretend loans (which were securities transactions) they destroyed WaMu and the economy. And all the foreclosures were fraud. Not a single bank had legal right to foreclose, because once a promissory note is converted & securitized, it's no longer a NOTE. It can't be converted back. It's no longer a tangible asset. The whole market came down because of this exact thing. There was no lenders. The borrowers weren't borrowers. And the notes were no longer notes.
And on top of not disclosing the true nature of the transactions, the borrowers were unknowingly entered into 3rd party transactions, without knowledge, consent, or recourse. But it gets worse. Because the notes were supposed to make into the REMIC trusts within 90 days. But they never made it at all. Because the banks were reselling them to over seas market investors. Which clouded damn near every title in America. Half the REMIC were empty. The investors got screwed. The home owners got screwed. And the insurance companies got screwed. America got screwed. All by Wall Street. And then we gave the bastard crooks a bailout. Then the banks inflated appraisals, fabricated documents, counterfeited the securities (which is a felony) committed securities fraud and tax evasion. Then contacted borrowers to offer them loan modifications under the false premise of having to be 90 days late (which is exactly how long they need to foreclose), then denied the homeowners their modifications to default them and collect on the insurance and credit default swaps, then after squeezing all they could, stole the properties through the fraudulent foreclosures using the fabricated documents and bid rigging.
And now cities in every state are crying about a giant homeless problem. LOL Well no ****!
- Member since 2019 · 6 posts · 5 votes6y
And financial experts are asking me if the question is a joke? Really... a joke? I'd hardly call felony crimes that collapse an economy a joke. How many small banks and businesses went bankrupt and closed? How many financial business felt the aftershocks? How many jobs and homes were lost?
A joke? A riddle? I'm inclined to ask the same thing about that question. If I didn't know what I do, I'd probably ask. And now we're on the verge of a third collapse, with a deadly virus on the loose. If I were tell you that 9/11 was an inside job for all the crap that happened, you'd probably think it was a joke too. But it wasn't. And because so many Americans refused to look at the truth, were here in this position. Haven't any of the financial professionals noticed that something was wrong? Besides Mike Stathis!
- Specialist · Fort Worth, TX · Member since 2014 · 528 posts · 226 votes6y
@Izraul Hidashi
I’m not claiming to know how the entire banking system works but I feel that I have a pretty good idea.A home loan is made via the note with a Mortgage/DOT (depending on state) attached as the security instrument, which allows the home to serve as collateral if the note is not upheld.
@Zachariah Prevost You stated that when a bank goes to sell the home loan to Fannie/Freddie or any other willing buyer for that matter, that they are stripping away the Mortgage/DOT from the note. In my limited thinking as a note investor, I’m not sure why that would be happening.Here’s why I say that. I know that when I’m buying a loan, I’m buying the future payments at some price. However if those payments are not made and the loan falls in to default, my security is knowing that I have collateral in the home and it’s value.
What I don't understand, and help me on this, is why someone would simply want to purchase the Mortgage/DOT without the note.
I'm aware that thousands of notes with their corresponding Mortgages/DOT's are packaged up and as a whole create an MBS (mortgage backed security). The seller receiving cash to reinvest or lend and the buyer to receive the payments on the thousands of loans within the MBS.
- Member since 2021 · 3 posts · 0 votes5yBy continuing to support a system which has stolen millions of homes from American people, for your own profit, you are a part of the problem.
- Member since 2021 · 3 posts · 0 votes5y
Izraul, you never indicated where the cash for the "loan" may have originated. Do you believe the Fed was the source of the funding? If so, yes, there was no loan at all. The mortgage should be considered null and void due to the bank having experienced no risk in the transaction. At best it acted as a broker and has no investment in the property. It did not make a loan, so that is false advertising, and the contract, which is the the mortgage, is based on fiction, otherwise known as fraud. Stamping a promissory note with for deposit only - no recourse, then applying initials or a signature of anyone but the note originator, and depositing it into a DDA account, also is a felony and renders the contract void.
Judges have been mostly supporting the "lenders" side in court actions, but, occasionally, one will find in favor of the borrower. I applaud your desire to expose the practices which created loss and financial hardship for so many. in order for the few who created the scheme to risk prison, and forfeiture of their resources, just to become even more wealthy... they had to know that there was not going to be any enforcement action taken regarding their criminal actions, or they would never have taken the considerable risks involved. The fix was in, the regulatory agencies turned a blind eye to the theft of person's homes and the financial ruin which resulted. It is a national disgrace that nothing has been done on behalf of the victims.
Clinton, and the institutions involved, should have been co-defendants in a criminal case in Federal Court. Class action lawsuits might still be a practical solution to the problem, but, if the statute of limitations is not waived, there is no chance of combining the original cases as their time to file has run out.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes5y
@Charles Robbins
I would say the ability to get a note and mortgage to acquire a home has helped a lot more people than it has hurt. My wife is from a country that does not allow lending or loans to acquire housing.
Last time I checked only people who have lost a home are those who do not pay.
Is the industry perfect or without fraud. Nope but it certainly assists for people than it hurts and also only about 1/2 the loans in the country get securitized.
7e investments53 Reviews - Investor · Orlando, FL · Member since 2013 · 837 posts · 316 votes5y
Originally posted by @Chris Seveney:
@Charles Robbins
I would say the ability to get a note and mortgage to acquire a home has helped a lot more people than it has hurt. My wife is from a country that does not allow lending or loans to acquire housing.
Last time I checked only people who have lost a home are those who do not pay.
I remember going to a mortgage closing on a personal home decades ago and the closing agent pushed the 3 inch stack of papers over for signing and said:
"This all says... You Pay, You Stay. You Don't, You Won't."
Still cracks me up.
- Member since 2019 · 6 posts · 5 votes5y
Originally posted by @Don Konipol:
Now I am totally confused! the note is converted or exchanged for credits? deposited in a demand deposit account? What am I missing?
It works like this.
When the promissory notes are signed, they state "For a Loan I Have Received." Past tense. Has the borrower actually received anything? No. So why do they say that? Why are the borrower being forced to lie? You don't find that unusual? Would you sign a document stating you received money if you haven't? I'm amazed that hasn't occurred to more professionals in the business, but there's a reason why the borrowers are being forced to lie.
When the borrower signs the promissory note, it becomes valuable. In fact, it's the only thing of value given at closing. And it's the borrower who gives it. If the note was just an IOU to evidence a debt, it wouldn't have value, thus, couldn't be sold. But It requires an endorsement. What are endorsements for? Cashing checks. You can't cash a check without an endorsement, right?
What happens to the note after the borrower endorses it? The back of the note is stamped "Pay to the Order of" to some third party "without recourse" like a check. Clearly the note is more than just evidence of a debt, right? That makes it a bearer instrument. And the notes state, "This note can be sold one or more times without notice" You can't sell evidence of a debt. That's worthless. If it can be sold, it must have value.
Here's where the fraud starts. After a note is endorsed, it gets deposited into a transaction account opened in the borrowers name, without their knowledge or consent. The bank then writes a check from the borrowers deposit account to whomever the money goes to.
Do you see what's happening? The notes are worthless until the borrowers endorse them, like checks. You and others believe the notes are just evidence of the debt. Actual money that comes from an actual lender. But there is no lender. The borrower, unknowingly, is also the lender. The bank never gives a dime, yet the borrower is required to sign a note that states they received a loan. What loan? The borrower never received anything. All the borrower did was give the bank money in the form of a convertible promissory note. It's not even disclosed that the note is convertible, which is required by law. I'm sure you know that, being in the business.
The borrower doesn't get anything at closing. The borrowers endorsed note is needed to complete the transaction. And the fraud doesn't end there. After the check is written on the borrowers undisclosed deposit account, the bank sells the note into the secondary market. Fact: When banks securitize notes, they can make up to 40x the amount of alleged loan. Whatever money they make off of securitization from the borrowers note is pure profit. More than enough to cover the check written on the undisclosed transaction account.
If you've kept up, you've realized by now that the bank received something of value from the borrower for free, and the borrower still hasn't received a single dime from anyone.
The real transaction was the exchange of property for the note. Something of value for something of value. But now the borrower is being made to pay back a supposed loan, which came from them, plus interest and principle. The banks don't give anything, they receive free money. And the fraud still isn't over.
Once the note is securitized it becomes a stock (or stock equivalent), meaning it's no longer a promissory note because it's converted (hence the convertible note). It's forever destroyed by the process of securitization. It can't be undone or converted back.
At that point the note is gone. But the bank still treats it as a secured debt. The note can't exist as a stock simultaneously because in the securities world it's a fraud known as double dipping. Once the note is separated from the deed, it's no longer secured. It becomes unsecured debt. Even though there really is no debt, due to the undisclosed fraud. Which is why a borrower who asks for a full accounting will never get it. Because a full accounting would require the T Ledgers, which in turn would show where the money came from.
If there were a real lender the bank would surely have no problems showing it. But they never do, or will. They'll fight tooth & nail in court to keep a full accounting hidden, even to the point of claiming protected work related. The most you'll see is that it comes from some Warehouse Lender, which is usually just another bank or affiliate. But there is no actual lender because all the money comes from the borrower.
In fact, these alleged loans aren't loans at all. They're really securities sales disguised as loans, since the undisclosed convertible notes become a share of securities for investors in the secondary market under the promulgated laws of the United States Securitie Exchange Commision (S.E.C.). They're converted, then pooled into REMIC mortgage trusts, which grants certain tax advantages under Title 26 of the U.S. Code.
The shares are represented by certificates sold to investors for the purpose of maximizing value and lowering risks of pooling payments on fixed assets, which allows for increased liquidity, thus aiding the total market. If you can't see a problem with that then you're in the wrong business (or the right one depending which way your moral compass points). The borrowers think they're getting a loan when in reality they're funding investor games in the secondary market. And unlike the borrowers, who fund the whole damn thing, the investors are covered for losses. You can't go to Vegas and expect to be reimbursed for your gambling losses.
So not only are the banks committing securities fraud, but tax fraud, and foreclosure fraud since the right to foreclose is extinguished by the exchange for their tax status under REMIC law. All of which is never disclosed to the borrower. The bank also commits insurance fraud when it collects on the default swaps, not to mention the free properties through fraudulent foreclosures, which automatically violates their REMIC status. The trust supposed to pay 100% back billions in tax if violated, but the IRS gave them a break after this whole game collapsed our economy. And the whole time the banks claim promissory notes are merely evidence of debts.
Does it makes sense now? It should make your blood boil. All of this is 100% true and verifiable through the IRS. if the borrower files certain documents. I forget which forms exactly, but they have to do with taxes. When the IRS processes them it requires tracing the money. What I just described is the reason for the 2008 financial collapse. The whole WaMu fiasco was directly tied into it.
The WaMu collapse was the biggest bank robbery ever, committed by Jamie Dimon & Sheila Bair. It was never in trouble. JP Morgan just sent moles to bring it down from the inside. Their REMIC securities fraud is what collapsed the economy. If you know who Mike Stathis is, he wrote a letter to the SEC warning of everything he saw unfolding. And what he got for it was a threatening visit by the FBI, because the FDIC was helping JP Morgan commit theft. That's why Chase was able to pay 1.9 billion for a 360 billion dollar bank. A bank they actually ended up getting for free because of a tax reductions. All at the expense of shareholders, investors and homeowners. We're talking trillions of dollars stolen from Americans by 5 of the largest banks.
Loan fraud, insurance fraud, tax fraud, securities fraud, investor fraud, and foreclosure fraud. I'm sure you have better resources to look into it than most people. But it's probably less stressful for most people to be ignorant of what's really going on around them. If it makes you happier to believe banks are moral and someone actually loans money to borrowers than so be it.
- Member since 2019 · 6 posts · 5 votes5y
Originally posted by @Chris Seveney:
@Izraul Hidashi
Look up fractional lending. Banks are allowed to lend more $ then they have in reserve. It’s not a secret. Then mortgages get collateralized and sold to Fannie or Freddie so they can keep lending and make money from the original fees.
Yes. Thank you. I know about fractional lending. And it has to do with some of it, but not all. What I'm talking about goes much deeper. If you read what I just described for someone else, you'll get a better idea of what I was talking about.
- Member since 2023 · 1 post · 1 vote2y
I believe you are correct. In simple terms. THE CREDITOR is the BORROWER. You're promissory note was exchanged for cash value that the banks recieved on youre behalf. Then returned the money to you as a loan + int and handed you another contract that has nothing to do with a loan called a MORTGAGE. Which then the NOTE,DEED&MORTGAGE IS SECURITIZED!!
- Member since 2024 · 1 post · 0 votes2y
There are two sides to every transaction: private and public.. It starys with the d
- Member since 2024 · 2 posts · 0 votes2y
Going through foreclosure now. Banks lawyer is playing Word games and dodging when I asked for original promissory note. He's playing it off like I'm asking for the 8 yr old note not the current one if still a note
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
@Chris Strausbaugh
What state as in many states a lost note can still take action - especially non judicial states
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