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Mortgage applications increased 1.3% from one week earlier,
according to data from the Mortgage Bankers Association’s (MBA)
Weekly Mortgage Applications Survey for the week ending October
7, 2011. The Market Composite Index, a measure of mortgage loan
application volume, increased 1.3% on a seasonally adjusted basis
from one week earlier. On an unadjusted basis, the Index
increased 1.3% compared with the previous week. The Refinance
Index increased 1.3% from the previous week. The seasonally
adjusted Purchase Index increased 1.1% from one week earlier. The
unadjusted Purchase Index increased 1.2% compared with the
previous week and was 2.9% lower than the same week one year ago.
The increases were driven mainly by the government loan category,
with the Government Purchase index up 2.4% and Government
Refinance index increasing 9.9%. The Conventional Purchase and
Refinance indexes increased 0.1% and 0.2%, respectively.
The four week moving average for the seasonally adjusted Market
Index is up 1.56%. The four week moving average is down 0.51%
for the seasonally adjusted Purchase Index, while this average is
up 2.15% for the Refinance Index. The refinance share of
mortgage activity remained unchanged at 79.1% of total
applications from the previous week. The adjustable-rate mortgage
(ARM) share of activity decreased to 6.0% from 6.4% of total
applications from the previous week. The average loan size of
all loans for home purchase in the US was $210,863 in September
2011, down from $212,736 in August 2011. The average loan size
for a refinance was $237,632, down from $241,323 in August. The
largest purchase loans were made in the Pacific region at $
302,110. The largest refinance loans were also made in the
Pacific region at $ 339,592.
Pennsylvania state capital declares bankruptcy
The Harrisburg, Pa., city council passed a resolution Tuesday
night authorizing a Chapter 9 bankruptcy filing, a city official
said today. Harrisburg faces a $300 million debt crises tied to
a project to revamp its incinerator and has been plagued with
cash flow problems. Mark Schwartz, the council's attorney in
this matter, said on Wednesday that the bankruptcy filing would
give the city ''bargaining power'' with its creditors and with
the state, which is considering a takeover plan. The bankruptcy
court for the middle district of Pennsylvania confirmed on
Wednesday it had received a faxed bankruptcy petition from
Harrisburg, but that it has not been filed yet.
The state legislature is considering a bill that would call for
an eventual takeover of the city and the forced implementation of
a fiscal rescue plan. In July, the city council rejected a
state-approved rescue plan, which called on it to renegotiate
labor deals, cut jobs, and sell or lease its most valuable
assets, including the incinerator and parking garages. In
August, the council rejected a similar plan that had been crafted
by Mayor Linda Thompson, saying that both plans were overly
burdensome for Harrisburg residents and did not ask enough of the
county, bondholders, and the bond insurer, Assured Guaranty.
MBA issues housing forecast
The Mortgage Bankers Association (MBA) expects to see mortgage
originations fall from an estimated $1.2 trillion in 2011 to $900
billion in 2012. The drop will be driven by a significant decline
in refinance originations, while purchase originations will
increase only slightly. The economy will see another year of
anemic growth in 2012, and then will grow somewhat faster in
2013. Refinance originations are expected to fall despite low
mortgage rates as economic uncertainty lingers and fewer eligible
borrowers remain. Following are the key points of the latest MBA
forecast:
- Real GDP growth will be 1.3% in 2011, which began with a
dismal 0.4% growth in the first quarter and 1.3% growth in the
second quarter. We expect the second half to average around 1.8%,
but even that is on shaky ground, with a weak labor market,
volatile financial markets, and looming risks of a spillover from
the European debt crisis. We expect 2012 to continue in a similar
fashion, showing growth of around 1.7%, as Europe enters a
recession of its own and the US economy flirts with a shallow
recession until midway through 2012. There should be a modest
recovery in 2013 with growth reaching 2.4% for the year.
- The unemployment rate will increase slowly until the second
quarter of 2012, hitting 9.3%, from the current level of 9.1%. It
is expected to be around 9.1% for 2011, 9.3% for 2012, and 9.1%
for 2013. Even though both economic and job growth are in
positive territory, they are still insufficient to lower the
unemployment rate in the near term.
- Fixed mortgage rates are expected to remain low by historical
standards, finishing 2011 at around a 4.5% average for the year,
falling slightly to 4.4% for 2012 and climbing back up to 4.9 by
2013.
- Total existing home sales will stay around the 4.9 million
unit pace for 2011 and 2012, before increasing slightly to 5.2
million units in 2013 as the broader economy recovers. The
recovery in the new home sales will have a comparably slow start,
and may well be slow for most of 2012, but will show some
meaningful increases in 2013.
- Home price measures that exclude distressed transactions have
stabilized, and certain markets are showing year-over-year
appreciation. FHFA's national repeat transactions home price
measure, which does not distinguish between distressed and
non-distressed sales, will continue to decline before starting a
reversal in mid to late 2012, but will vary by state and home
value.
- Purchase originations will likely decrease in 2011 from 2010,
totaling $400 billion from an estimated $472 billion in 2010.
Seeing as 2012 will likely be another year of slow economic
growth, purchase originations will increase to slightly around
$412 billion for the year. As the economy picks up a little more
speed in 2013 and home sales and home prices also start to
increase, purchase originations are expected to increase to $770
billion for the year.
- Despite lower mortgage rates towards the end of the year,
refinance originations in 2011 will be lower than in 2010,
falling to $783 billion from an estimated $1.1 trillion, as there
were fewer eligible borrowers left to refinance. We expect this
“burnout” to continue through 2012 and 2013, even as rates
remain below 5%, with refinance originations falling steadily to
$495 billion and then $332 billion, respectively.
Oil up
Oil prices inched up above $86 a barrel Wednesday, supported by a
weaker dollar even as concerns persisted about the sovereign debt
crisis in Europe and the International Energy Agency slightly
lowered its demand growth forecasts. By early afternoon in
Europe, benchmark crude for November delivery was up 70 cents at
$86.51 a barrel in electronic trading on the New York Mercantile
Exchange. The contract rose 40 cents to settle at $85.81 in New
York on Tuesday. In London, Brent crude was up $1.23 to $111.96
a barrel on the ICE Futures exchange. The euro gained on the
dollar after the release of fresh data showing that industrial
production in the 17 countries using the common European currency
rose unexpectedly in August, easing concerns that the region was
heading back into recession in the third quarter.
A weaker dollar tends to lift the price of commodities such as
oil by making it cheaper for investors holding other currencies.
The euro was up to $1.3806 from $1.3669 late Monday in New York,
while the dollar weakened to 76.58 yen from 76.66 yen. The
Paris-based IEA said it was now expecting global demand to rise
to 89.2 million barrels a day this year -- 1 million barrels more
than in 2010 -- and to 90.5 million barrels a day in 2012.
Compared with last month's forecasts, these revisions were lower
by 50,000 barrels a day for 2011 and by 210,000 barrels a day for
2012.
DSNews.com - west coast foreclosures fall
New foreclosure actions in states along the country’s West
Coast returned to levels in line with prior months during
September, according to ForeclosureRadar, a California-based
company that tracks every foreclosure in its five-state coverage
area. The leveling off in September follows a strong surge in
foreclosure starts during the month of August in the western
states of Arizona, California, Nevada, Oregon, and Washington,
and puts new foreclosure tallies far below the numbers seen at
the peak of each state’s foreclosure activity.
ForeclosureRadar reports California has seen a drop in activity
of 56% since its peak, from 58,623 notice of default filings in
March of 2009 to 25,778 today. Arizona shows a similar swing in
notice of trustee sale filings, from 14,722 in March of 2009 to
5,982 filings last month – a decrease of 59.4%. Washington has
experienced the greatest decline of all, with 71.5% fewer notice
of trustee sale filings today than at their peak in June of 2009.
Foreclosure sales were mixed last month, with declines in
Arizona, California, and Nevada, while Oregon and Washington both
showed increases. Despite declines in three of the five states,
ForeclosureRadar notes that the percentage of foreclosure sales
that went to third parties, typically investors, was at or near
peak levels. In California, third parties purchased a record
27.4% of all foreclosure sales last month. In Arizona, that
number was even higher at 38.3%, also a record. Nevada was just
shy of its record, set in August at 29.1%. Sales to third
parties in Washington were up 15.6%, a record for this year.
Oregon was the only state to show a decrease, down from 15.5% in
July to 6.0% last month. “While foreclosure activity returned
to its normal course in September, we fully expect to see more
volatility like we saw in August as banks continue to work in
fits and starts through robo-signing and other issues,” said
Sean O’Toole, founder and CEO of ForeclosureRadar. “It’s
almost unfathomable that four years into this crisis there would
still be so much uncertainty on how to best deal with the
trillions in bad mortgage debt that was created during the credit
bubble,” O’Toole added.
BOA offers cash for short sales
Bank of America (BOA), the nation's largest mortgage servicer, is
offering Florida homeowners up to $20,000 to short sale their
homes rather than letting them linger in foreclosure. The
limited time offer has received little promotion from the
Charlotte, N.C.-based bank, which sent emails to select Florida
Realtors earlier this week outlining basic details of the plan.
Only homeowners whose short sales are submitted for approval to
BOA before Nov. 30 will qualify. The homes must have no offers on
them already and the closing must occur before Aug. 31, 2012.
Realtors say the BOA plan, which has a minimum payout amount of
$5,000, is a genuine incentive to struggling homeowners who may
otherwise fall into Florida's foreclosure abyss. The current
timeline to foreclosure in Florida is an average of 676 days -
nearly two years - according to real estate analysis company
RealtyTrac. The national average foreclosure timeline is 318
days. Guy Cecala, chief executive officer and publisher of
Inside Mortgage Finance, called the short sale payout a "bribe."
"You can call it a relocation fee, but it's basically a bribe to
make sure the borrower leaves the house in good condition and in
an orderly fashion," Cecala said. "It makes good business sense
considering you may have to put $20,000 into a foreclosed home to
fix it up." Homeowners, especially ones who feel cheated by the
bank, have been known to steal appliances and other fixtures, or
damage the home.
A spokesman for BOA said the program is being tested in Florida,
and if successful, could be expanded to other states. Wells
Fargo and J.P. Morgan Chase have similar short sale programs,
sometimes called "cash for keys." Wells Fargo spokesman Jason
Menke said his company offers up to $20,000 on eligible short
sales that are left in "broom swept" condition. Although the
program is not advertised, deals are mostly made on homes in
states with lengthy foreclosure timelines, he said. And caveats
exist. The Wells Fargo short sale incentive is only good on first
lien loans that it owns, which is about 20% of its total
portfolio. BOA's plan excludes Ginnie Mae, Federal Housing
Administration and VA loans. Similar to the federal Home
Affordable Foreclosure Alternatives program, or HAFA, which
offers $3,000 in relocation assistance, the BOA program may also
waive a homeowner's deficiency judgment at closing. A deficiency
judgment in a short sale is basically the difference between what
the house sells for and what is still owed on the loan. HAFA,
which began in April 2010, has seen limited success with just
15,531 short sales completed nationwide through August.
Hiring picks up
Employers added 103,000 jobs in the month, the Labor Department
reported Friday. And July and August were both revised higher,
showing an additional gain of 99,000 jobs over the summer.
Businesses added 137,000 jobs, including 45,000 Verizon strikers
who returned to work last month. But that hiring was slightly
offset by a loss of 34,000 public jobs, mostly at the local
government level. Economists had predicted the private sector
would add 90,000 workers in the month. Meanwhile, the
unemployment rate remained at 9.1% in August, in line with
economists' forecasts. Even with the pickup in hiring,
September's report was still considered relatively weak. So far,
the economy has recovered only a fraction million of the 8.7
million jobs lost since the recession began. And economists often
say the economy needs to add at least 150,000 jobs a month just
to keep pace with population growth.
Olick - rates, prices, demand all falls
"When mortgage rates first fell below five% in 2009, we called it
an emotional landmark, a level that, while not significantly
different from the previous week or month, would send up a flag
to borrowers that it was time to buy or at least to refinance.
And they did. Now the 30-year fixed has fallen below four%, and
it all seems suddenly like white noise. As mortgage rates fell
last week, so too did mortgage applications, for both refinances
and purchases. Lower rates usually spur refinances, but those
actually fell the most, down 5.2% week-to-week, according to the
Mortgage Bankers Association. Applications to purchase a home
fell just 0.8%, but they are at historic lows as it is, down 12%
from a year ago.
The Mortgage Bankers said potential borrowers, 'largely remained
on the sidelines, seemingly unimpressed,' by these rates, which
we haven't seen since the 1940's. Perhaps they were unimpressed,
or perhaps they were just scared straight by the impetus for the
low rates, which was the rush to Treasuries spurred by a global
economic crisis. Hmmm. They may also be on the sidelines
because, after a brief and delayed Spring bounce in home prices,
values are slipping once again. Home prices fell month to month
for the first time in four months, according to a new report from
CoreLogic. Another index from Clear Capital, which uses a running
quarter, found prices softening in September quarter to quarter,
after several strong months. 'The company forecasts additional
declines through the first quarter and potential for a triple-dip
in the housing market.'
I'm not sure what a 'triple-dip' is, since I'm not at all
convinced we were coming out of the double dip that started after
the end of the home buyer tax credit. So many housing watchers
fail to note that even in a crisis, housing continues to be a
highly seasonal business, and prices always rise in the Spring,
even if only slightly. So we saw some price gains in the last
several reports, but they were all still down annually, and down
from some pretty weak numbers to begin with. Home sales bumped a
bit, but not significantly and not nearly enough to spell
recovery. This as foreclosure starts jumped nearly 20% in August
from July to a 2011 high, according to Lender Processing
Services. So back to the new record-low mortgage rates. They
will likely do nothing to spur home buying, but they will provide
all kinds of fodder for the current administration to push some
kind of enhanced refinance program, which is supposedly targeted
at borrowers who are not behind on their mortgages. As the
political season heats up, and housing cools down for the winter,
there will surely be plenty of shouting at the wind over
potential housing stimulus/bailouts, while behind the curtain,
politicians, from those in power to those fighting for power,
have largely thrown their hands up in despair."
Solyndra was a waste
Political furor over the Solyndra bankruptcy has dealt a body
blow to the idea that the US government should try to help clean
tech start-ups through the costly "valley of death" to commercial
viability. The capital needed to commercialize cutting-edge,
renewable energy technology is seen as too risky for both venture
capitalists and for the banks. The Obama administration has
marshaled a patchwork of loans, guarantees, tax credits and
grants to bridge the gap, trying to use the programs to spur the
languishing industry at a time the US economy was in dire need of
jobs. But congressional support for the financing is about to
dry up. Six of 10 key clean energy financing and tax programs
will expire by the end of December. And headlines about
Solyndra—the solar panel maker that filed for bankruptcy after
burning through $535 million in government loans—has damaged
confidence in government involvement.
Solyndra, backed by more than $1 billion in venture capital, got
a massive cash infusion as the first recipient of a loan
guarantee from the Energy Department under a program expanded and
highly touted by the Obama administration, as it looked to the
green tech sector to spur job creation. Its factory was toured
and praised by Obama, misgivings from some government analysts
and warnings from venture capitalists about the company's lack of
cash. Those concerns have come to light through an eight-month
investigation by Republicans in the House of Representatives. The
FBI raided the company last month. The timing of the company's
downfall, coming ahead of the 2012 presidential election,
produced a political maelstrom. Republicans have alleged poor
management and political favoritism led to the ill-fated loans
because Solyndra's investors included an Obama
fundraiser—charges that the administration has aggressively
disputed. Obama has defended the program, which has guaranteed
more than $16 billion in loans, saying some failures had been
expected. He also accused Republicans of giving up on renewable
energy while China and other countries offer the sector cheap
capital. Republicans believe the government should stay out of
the private sector, and that cutting the gaping deficit is more
important than trying to support manufacturers of risky renewable
energy technology.
Home ownership sees biggest drop since Great Depression
The percentage of Americans who owned their homes has seen its
biggest decline since the Great Depression, according to the US
Census Bureau. The rate of home ownership fell to 65.1% in April
2010, 1.1 percentage points lower than it was in 2000. The
decline was the biggest drop since the 1930s, when home ownership
plunged 4.2%. The most recent decade-over-decade drop, however,
only tells half the story. Home ownership during the 2000s "was
really high in the middle of the decade, up to almost 70% at one
point around 2004," said Ellen Wilson, a survey statistician with
the bureau. The crash from that peak was more than 4 percentage
points in just about five years -- a far more dramatic decline
than the 1.1% drop over the 10-year period. Certain regions have
been hit harder than others. The West had the lowest home
ownership rate at 60.5%, while the Midwest had the highest rate
at 69.2%.The South came in at 66.7% and the Northeast at 62.2%.
Among the states, New York had the lowest home ownership rate of
53.3%, but the District of Columbia's home ownership rate was
below that at 42%. West Virginia (73.4%) led the way with the
highest home ownership rate, while Minnesota (73%), Michigan,
Delaware and Iowa (all 72.1%) were also well above the norm.
The number of vacant homes also grew by 44%. Thanks to the
housing bust there has been a substantial increase in empty
homes. The number of vacant housing units jumped an astonishing
43.8% to 15 million (or 11.4% of all housing units) in 2010, up
from 10.4 million in 2000. During that 10-year period, the
number of homes in the US increased by 16 million to 131.7
million housing units, according to Census. Many Sun-Belt states
suffered large vacancy increases. In Nevada, ground zero for
foreclosures over the past few years, vacancies grew nearly 120%
to 14.3% of all homes. Georgia vacancies jumped 82.7%, Florida's
62.6% and Arizona's 61%. Although vacancies in Maine grew by
only 23%, the state had the highest percentage of vacant homes
overall at 22.8%. Vermont was close behind with 20.5% of its
homes empty. Florida was third with 17.5%.
Many of the nation's residents have also become renters,
especially in large metropolitan areas. Of the 10 largest
cities, New York had the highest ratio with a whopping 69% of all
homes in the five boroughs -- Manhattan, Brooklyn, Queens, the
Bronx and Staten Island -- occupied by renters. Los Angeles had a
61.5% rental rate and Dallas was 55.9%. San Jose had the lowest
percentage of renters for any of the 10 largest cities with just
41.5%. San Antonio (43.5.%) and Phoenix (42.4%) had comparatively
few renters as well.
Obama campaigns on job bill
Declaring the US economy "really needs a jolt right now,"
President Obama again urged Congress to pass his $447 billion
jobs bill during a press conference yesterday. "What's true is
we've also got to rein in our deficits and live within our means,
which is why this jobs bill is fully paid for by asking
millionaires and billionaires(as if there's no difference between
the two) to pay their fair share," the President said, restating
his support of the so-called Buffett Rule. Obama also said he is
"comfortable" with the millionaire's surtax Senate Majority
Leader Harry Reid has proposed. "Some see this as class
warfare," the President said. "I see it as a simple choice: We
can either keep taxes as -- exactly as they are for millionaires
and billionaires, with loopholes that lead them to have lower tax
rates in some cases than plumbers and teachers, or we can put
teachers and construction workers and veterans back on the job."
(I'm sure others see it as a false dichotomy - between
"millionaires and billionaires" and "teachers and construction
workers and veterans.") In addition (or instead of) class
warfare, some see this as naked politicking by a President
suffering from flagging poll numbers. "We're legislating. He's
campaigning. It's very disappointing," House Speaker John Boehner
said in response to Obama's press conference. "Nothing has
disappointed me more than what has happened in the last five
weeks... To watch the president of the United States give up on
governing, give up on leading and just spend time campaigning."
Money for "fair housing"
The Department of Housing and Urban Development awarded more than
$28 million in grants to non-profits to combat housing
discrimination. The agency provided funds to 84 organizations in
33 states and Washington, D.C., through its Fair Housing
Initiatives Program to help investigate allegations of housing
discrimination. "The Obama Administration is committed to ending
housing discrimination, and these grants enable local fair
housing and community organizations all over the nation to help
HUD enforce the Fair Housing Act, and make people more aware of
their fair housing rights," HUD Secretary Shaun Donovan said.
HUD said about $17.5 million of the grant money will be used to
investigate housing discrimination, $4.6 million to educate the
public about housing rights and $5.9 million to serve rural and
immigrant populations in areas where there are no standing fair
housing organizations.
THE TRUTH ABOUT YOUR MORTGAGE BANKER NO ONE TOLD YOU OR DISCLOSED TO YOU WHICH IS LEGAL REQUIREMENT???
SOME OF YOU MAY KNOW THIS, MANY DON'T.
SHARE TO ENLIGHTEN THOSE WHO DO NOT KNOW.
You can not longer keep your head in the sand after this!
For those that really have wondered how a loan works in a fiat currency debt based banking system here it is. Some may be amazed and feel that of a dupe and others are already very aware that this is how it is. More and more people are waking up to this and starting to question business as usual.
It Really Works Like This -- No Joke
This is the way a "bank loan" really works.
Interviews with bankers about a foreclosure. The banker was placed on the witness stand and sworn in. The plaintiff's (borrower's) attorney asked the banker the routine questions concerning the banker's education and background.
The attorney asked the banker, "What is court exhibit A?"
The banker responded by saying, "This is a promissory note."
The attorney then asked, "Is there an agreement between Mr. Smith (borrower) and the defendant?"
The banker said, "Yes."
The attorney asked, "Do you believe the agreement includes a lender and a borrower?"
The banker responded by saying, "Yes, I am the lender and Mr. Smith is the borrower."
The attorney asked, "What do you believe the agreement is?"
The banker quickly responded, saying, " We have the borrower sign the note and we give the borrower a check."
The attorney asked, "Does this agreement show the words borrower, lender, loan, interest, credit, or money within the agreement?"
The banker responded by saying, "Sure it does."
The attorney asked, `"According to your knowledge, who was to loan what to whom according to the written agreement?"
The banker responded by saying, "The lender loaned the borrower a $50,000 check. The borrower got the money and the house and has not repaid the money."
The attorney noted that the banker never said that the bank received the promissory note as a loan from the borrower to the bank. He asked, "Do you believe an ordinary person can use ordinary terms and understand this written agreement?"
The banker said, "Yes."
The attorney asked, "Do you believe you or your company legally own the promissory note and have the right to enforce payment from the borrower?"
The banker said, "Absolutely we own it and legally have the right to collect the money."
The attorney asked, "Does the $50,000 note have actual cash value of $50,000? Actual cash value means the promissory note can be sold for $50,000 cash in the ordinary course of business."
The banker said, "Yes."
The attorney asked, "According to your understanding of the alleged agreement, how much actual cash value must the bank loan to the borrower in order for the bank to legally fulfill the agreement and legally own the promissory note?"
The banker said, "$50,000."
The attorney asked, "According to your belief, if the borrower signs the promissory note and the bank refuses to loan the borrower $50,000 actual cash value, would the bank or borrower own the promissory note?"
The banker said, "The borrower would own it if the bank did not loan the money. The bank gave the borrower a check and that is how the borrower financed the purchase of the house."
The attorney asked, "Do you believe that the borrower agreed to provide the bank with $50,000 of actual cash value which was used to fund the $50,000 bank loan check back to the same borrower, and then agreed to pay the bank back $50,000 plus interest?"
The banker said, "No. If the borrower provided the $50,000 to fund the check, there was no money loaned by the bank so the bank could not charge interest on money it never loaned."
The attorney asked, "If this happened, in your opinion would the bank legally own the promissory note and be able to force Mr. Smith to pay the bank interest and principal payments?"
The banker said, "I am not a lawyer so I cannot answer legal questions."
The attorney asked, " Is it bank policy that when a borrower receives a $50,000 bank loan, the bank receives $50,000 actual cash value from the borrower, that this gives value to a $50,000 bank loan check, and this check is returned to the borrower as a bank loan which the borrower must repay?"
The banker said, "I do not know the bookkeeping entries."
The attorney said, "I am asking you if this is the policy."
The banker responded, "I do not recall."
The attorney again asked, "Do you believe the agreement between Mr. Smith and the bank is that Mr. Smith provides the bank with actual cash value of $50,000 which is used to fund a $50,000 bank loan check back to himself which he is then required to repay plus interest back to the same bank?"
The banker said, " I am not a lawyer."
The attorney said, "Did you not say earlier that an ordinary person can use ordinary terms and understand this written agreement?"
The banker said, "Yes."
The attorney handed the bank loan agreement marked "Exhibit B" to the banker. He said, "Is there anything in this agreement showing the borrower had knowledge or showing where the borrower gave the bank authorization or permission for the bank to receive $50,000 actual cash value from him and to use this to fund the $50,000 bank loan check which obligates him to give the bank back $50,000 plus interest?"
The banker said, "No."
The lawyer asked, "If the borrower provided the bank with actual cash value of $50,000 which the bank used to fund the $50,000 check and returned the check back to the alleged borrower as a bank loan check, in your opinion, did the bank loan $50,000 to the borrower?"
The banker said, "No."
The attorney asked, "If a bank customer provides actual cash value of $50,000 to the bank and the bank returns $50,000 actual cash value back to the same customer, is this a swap or exchange of $50,000 for $50,000."
The banker replied, "Yes."
The attorney asked, "Did the agreement call for an exchange of $50,000 swapped for $50,000, or did it call for a $50,000 loan?"
The banker said, "A $50,000 loan."
The attorney asked, "Is the bank to follow the Federal Reserve Bank policies and procedures when banks grant loans."
The banker said, "Yes."
The attorney asked, "What are the standard bank bookkeeping entries for granting loans according to the Federal Reserve Bank policies and procedures?" The attorney handed the banker FED publication Modern Money Mechanics, marked "Exhibit C".
The banker said, "The promissory note is recorded as a bank asset and a new matching deposit (liability) is created. Then we issue a check from the new deposit back to the borrower."
The attorney asked, "Is this not a swap or exchange of $50,000 for $50,000?"
The banker said, "This is the standard way to do it."
The attorney said, "Answer the question. Is it a swap or exchange of $50,000 actual cash value for $50,000 actual cash value? If the note funded the check, must they not both have equal value?"
The banker then pleaded the Fifth Amendment.
The attorney asked, "If the bank's deposits (liabilities) increase, do the bank's assets increase by an asset that has actual cash value?"
The banker said, "Yes."
The attorney asked, "Is there any exception?"
The banker said, "Not that I know of."
The attorney asked, "If the bank records a new deposit and records an asset on the bank's books having actual cash value, would the actual cash value always come from a customer of the bank or an investor or a lender to the bank?"
The banker thought for a moment and said, "Yes."
The attorney asked, "Is it the bank policy to record the promissory note as a bank asset offset by a new liability?"
The banker said, "Yes."
The attorney said, "Does the promissory note have actual cash value equal to the amount of the bank loan check?"
The banker said "Yes."
The attorney asked, "Does this bookkeeping entry prove that the borrower provided actual cash value to fund the bank loan check?"
The banker said, "Yes, the bank president told us to do it this way."
The attorney asked, "How much actual cash value did the bank loan to obtain the promissory note?"
The banker said, "Nothing."
The attorney asked, "How much actual cash value did the bank receive from the borrower?"
The banker said, "$50,000."
The attorney said, "Is it true you received $50,000 actual cash value from the borrower, plus monthly payments and then you foreclosed and never invested one cent of legal tender or other depositors' money to obtain the promissory note in the first place? Is it true that the borrower financed the whole transaction?"
The banker said, "Yes."
The attorney asked, "Are you telling me the borrower agreed to give the bank $50,000 actual cash value for free and that the banker returned the actual cash value back to the same person as a bank loan?"
The banker said, "I was not there when the borrower agreed to the loan."
The attorney asked, "Do the standard FED publications show the bank receives actual cash value from the borrower for free and that the bank returns it back to the borrower as a bank loan?"
The banker said, "Yes."
The attorney said, "Do you believe the bank does this without the borrower's knowledge or written permission or authorization?"
The banker said, "No."
The attorney asked, "To the best of your knowledge, is there written permission or authorization for the bank to transfer $50,000 of actual cash value from the borrower to the bank and for the bank to keep it for free?
The banker said, "No."
Does this allow the bank to use this $50,000 actual cash value to fund the $50,000 bank loan check back to the same borrower, forcing the borrower to pay the bank $50,000 plus interest? "
The banker said, "Yes."
The attorney said, "If the bank transferred $50,000 actual cash value from the borrower to the bank, in this part of the transaction, did the bank loan anything of value to the borrower?"
The banker said, "No." He knew that one must first deposit something having actual cash value (cash, check, or promissory note) to fund a check.
The attorney asked, "Is it the bank policy to first transfer the actual cash value from the alleged borrower to the lender for the amount of the alleged loan?"
The banker said, "Yes."
The attorney asked, "Does the bank pay IRS tax on the actual cash value transferred from the alleged borrower to the bank?"
The banker answered, "No, because the actual cash value transferred shows up like a loan from the borrower to the bank, or a deposit which is the same thing, so it is not taxable."
The attorney asked, "If a loan is forgiven, is it taxable?"
The banker agreed by saying, "Yes."
The attorney asked, "Is it the bank policy to not return the actual cash value that they received from the alleged borrower unless it is returned as a loan from the bank to the alleged borrower?"
"Yes", the banker replied.
The attorney said, "You never pay taxes on the actual cash value you receive from the alleged borrower and keep as the bank's property?"
"No. No tax is paid.", said the crying banker.
The attorney asked, "When the lender receives the actual cash value from the alleged borrower, does the bank claim that it then owns it and that it is the property of the lender, without the bank loaning or risking one cent of legal tender or other depositors' money?"
The banker said, "Yes."
The attorney asked, "Are you telling me the bank policy is that the bank owns the promissory note (actual cash value) without loaning one cent of other depositors' money or legal tender, that the alleged borrower is the one who provided the funds deposited to fund the bank loan check, and that the bank gets funds from the alleged borrower for free? Is the money then returned back to the same person as a loan which the alleged borrower repays when the bank never gave up any money to obtain the promissory note? Am I hearing this right? I give you the equivalent of $50,000, you return the funds back to me, and I have to repay you $50,000 plus interest? Do you think I am stupid?"
In a shaking voice the banker cried, saying, "All the banks are doing this. Congress allows this."
The attorney quickly responded, "Does Congress allow the banks to breach written agreements, use false and misleading advertising, act without written permission, authorization, and without the alleged borrower's knowledge to transfer actual cash value from the alleged borrower to the bank and then return it back as a loan?"
The banker said, "But the borrower got a check and the house."
The attorney said, "Is it true that the actual cash value that was used to fund the bank loan check came directly from the borrower and that the bank received the funds from the alleged borrower for free?"
"It is true", said the banker.
The attorney asked, "Is it the bank's policy to transfer actual cash value from the alleged borrower to the bank and then to keep the funds as the bank's property, which they loan out as bank loans?"
The banker, showing tears of regret that he had been caught, confessed, "Yes."
The attorney asked, "Was it the bank's intent to receive actual cash value from the borrower and return the value of the funds back to the borrower as a loan?"
The banker said, "Yes." He knew he had to say yes because of the bank policy.
The attorney asked, "Do you believe that it was the borrower's intent to fund his own bank loan check?"
The banker answered, "I was not there at the time and I cannot know what went through the borrower's mind."
The attorney asked, "If a lender loaned a borrower $10,000 and the borrower refused to repay the money, do you believe the lender is damaged?"
The banker thought. If he said no, it would imply that the borrower does not have to repay. If he said yes, it would imply that the borrower is damaged for the loan to the bank of which the bank never repaid. The banker answered, "If a loan is not repaid, the lender is damaged."
The attorney asked, "Is it the bank policy to take actual cash value from the borrower, use it to fund the bank loan check, and never return the actual cash value to the borrower?"
The banker said, "The bank returns the funds."
The attorney asked, "Was the actual cash value the bank received from the alleged borrower returned as a return of the money the bank took or was it returned as a bank loan to the borrower?"
The banker said, "As a loan."
The attorney asked, "How did the bank get the borrower's money for free?"
The banker said, "That is how it works."
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THE TRUTH ABOUT YOUR MORTGAGE BANKER NO ONE TOLD YOU OR DISCLOSED TO YOU WHICH IS LEGAL REQUIREMENT???
SOME OF YOU MAY KNOW THIS, MANY DON'T.
SHARE TO ENLIGHTEN THOSE WHO DO NOT KNOW.
You can no longer keep your head in the sand after this!
For those that really have wondered how a loan works in a fiat currency debt based banking system here it is. Some may be amazed and feel that of a dupe and others are already very aware that this is how it is. More and more people are waking up to this and starting to question business as usual.
It Really Works Like This -- No Joke
This is the way a "bank loan" really works.
Interviews with bankers about a foreclosure. The banker was placed on the witness stand and sworn in. The plaintiff's (borrower's) attorney asked the banker the routine questions concerning the banker's education and background.
The attorney asked the banker, "What is court exhibit A?"
The banker responded by saying, "This is a promissory note."
The attorney then asked, "Is there an agreement between Mr. Smith (borrower) and the defendant?"
The banker said, "Yes."
The attorney asked, "Do you believe the agreement includes a lender and a borrower?"
The banker responded by saying, "Yes, I am the lender and Mr. Smith is the borrower."
The attorney asked, "What do you believe the agreement is?"
The banker quickly responded, saying, " We have the borrower sign the note and we give the borrower a check."
The attorney asked, "Does this agreement show the words borrower, lender, loan, interest, credit, or money within the agreement?"
The banker responded by saying, "Sure it does."
The attorney asked, `"According to your knowledge, who was to loan what to whom according to the written agreement?"
The banker responded by saying, "The lender loaned the borrower a $50,000 check. The borrower got the money and the house and has not repaid the money."
The attorney noted that the banker never said that the bank received the promissory note as a loan from the borrower to the bank. He asked, "Do you believe an ordinary person can use ordinary terms and understand this written agreement?"
The banker said, "Yes."
The attorney asked, "Do you believe you or your company legally own the promissory note and have the right to enforce payment from the borrower?"
The banker said, "Absolutely we own it and legally have the right to collect the money."
The attorney asked, "Does the $50,000 note have actual cash value of $50,000? Actual cash value means the promissory note can be sold for $50,000 cash in the ordinary course of business."
The banker said, "Yes."
The attorney asked, "According to your understanding of the alleged agreement, how much actual cash value must the bank loan to the borrower in order for the bank to legally fulfill the agreement and legally own the promissory note?"
The banker said, "$50,000."
The attorney asked, "According to your belief, if the borrower signs the promissory note and the bank refuses to loan the borrower $50,000 actual cash value, would the bank or borrower own the promissory note?"
The banker said, "The borrower would own it if the bank did not loan the money. The bank gave the borrower a check and that is how the borrower financed the purchase of the house."
The attorney asked, "Do you believe that the borrower agreed to provide the bank with $50,000 of actual cash value which was used to fund the $50,000 bank loan check back to the same borrower, and then agreed to pay the bank back $50,000 plus interest?"
The banker said, "No. If the borrower provided the $50,000 to fund the check, there was no money loaned by the bank so the bank could not charge interest on money it never loaned."
The attorney asked, "If this happened, in your opinion would the bank legally own the promissory note and be able to force Mr. Smith to pay the bank interest and principal payments?"
The banker said, "I am not a lawyer so I cannot answer legal questions."
The attorney asked, " Is it bank policy that when a borrower receives a $50,000 bank loan, the bank receives $50,000 actual cash value from the borrower, that this gives value to a $50,000 bank loan check, and this check is returned to the borrower as a bank loan which the borrower must repay?"
The banker said, "I do not know the bookkeeping entries."
The attorney said, "I am asking you if this is the policy."
The banker responded, "I do not recall."
The attorney again asked, "Do you believe the agreement between Mr. Smith and the bank is that Mr. Smith provides the bank with actual cash value of $50,000 which is used to fund a $50,000 bank loan check back to himself which he is then required to repay plus interest back to the same bank?"
The banker said, " I am not a lawyer."
The attorney said, "Did you not say earlier that an ordinary person can use ordinary terms and understand this written agreement?"
The banker said, "Yes."
The attorney handed the bank loan agreement marked "Exhibit B" to the banker. He said, "Is there anything in this agreement showing the borrower had knowledge or showing where the borrower gave the bank authorization or permission for the bank to receive $50,000 actual cash value from him and to use this to fund the $50,000 bank loan check which obligates him to give the bank back $50,000 plus interest?"
The banker said, "No."
The lawyer asked, "If the borrower provided the bank with actual cash value of $50,000 which the bank used to fund the $50,000 check and returned the check back to the alleged borrower as a bank loan check, in your opinion, did the bank loan $50,000 to the borrower?"
The banker said, "No."
The attorney asked, "If a bank customer provides actual cash value of $50,000 to the bank and the bank returns $50,000 actual cash value back to the same customer, is this a swap or exchange of $50,000 for $50,000."
The banker replied, "Yes."
The attorney asked, "Did the agreement call for an exchange of $50,000 swapped for $50,000, or did it call for a $50,000 loan?"
The banker said, "A $50,000 loan."
The attorney asked, "Is the bank to follow the Federal Reserve Bank policies and procedures when banks grant loans."
The banker said, "Yes."
The attorney asked, "What are the standard bank bookkeeping entries for granting loans according to the Federal Reserve Bank policies and procedures?" The attorney handed the banker FED publication Modern Money Mechanics, marked "Exhibit C".
The banker said, "The promissory note is recorded as a bank asset and a new matching deposit (liability) is created. Then we issue a check from the new deposit back to the borrower."
The attorney asked, "Is this not a swap or exchange of $50,000 for $50,000?"
The banker said, "This is the standard way to do it."
The attorney said, "Answer the question. Is it a swap or exchange of $50,000 actual cash value for $50,000 actual cash value? If the note funded the check, must they not both have equal value?"
The banker then pleaded the Fifth Amendment.
The attorney asked, "If the bank's deposits (liabilities) increase, do the bank's assets increase by an asset that has actual cash value?"
The banker said, "Yes."
The attorney asked, "Is there any exception?"
The banker said, "Not that I know of."
The attorney asked, "If the bank records a new deposit and records an asset on the bank's books having actual cash value, would the actual cash value always come from a customer of the bank or an investor or a lender to the bank?"
The banker thought for a moment and said, "Yes."
The attorney asked, "Is it the bank policy to record the promissory note as a bank asset offset by a new liability?"
The banker said, "Yes."
The attorney said, "Does the promissory note have actual cash value equal to the amount of the bank loan check?"
The banker said "Yes."
The attorney asked, "Does this bookkeeping entry prove that the borrower provided actual cash value to fund the bank loan check?"
The banker said, "Yes, the bank president told us to do it this way."
The attorney asked, "How much actual cash value did the bank loan to obtain the promissory note?"
The banker said, "Nothing."
The attorney asked, "How much actual cash value did the bank receive from the borrower?"
The banker said, "$50,000."
The attorney said, "Is it true you received $50,000 actual cash value from the borrower, plus monthly payments and then you foreclosed and never invested one cent of legal tender or other depositors' money to obtain the promissory note in the first place? Is it true that the borrower financed the whole transaction?"
The banker said, "Yes."
The attorney asked, "Are you telling me the borrower agreed to give the bank $50,000 actual cash value for free and that the banker returned the actual cash value back to the same person as a bank loan?"
The banker said, "I was not there when the borrower agreed to the loan."
The attorney asked, "Do the standard FED publications show the bank receives actual cash value from the borrower for free and that the bank returns it back to the borrower as a bank loan?"
The banker said, "Yes."
The attorney said, "Do you believe the bank does this without the borrower's knowledge or written permission or authorization?"
The banker said, "No."
The attorney asked, "To the best of your knowledge, is there written permission or authorization for the bank to transfer $50,000 of actual cash value from the borrower to the bank and for the bank to keep it for free?
The banker said, "No."
Does this allow the bank to use this $50,000 actual cash value to fund the $50,000 bank loan check back to the same borrower, forcing the borrower to pay the bank $50,000 plus interest? "
The banker said, "Yes."
The attorney said, "If the bank transferred $50,000 actual cash value from the borrower to the bank, in this part of the transaction, did the bank loan anything of value to the borrower?"
The banker said, "No." He knew that one must first deposit something having actual cash value (cash, check, or promissory note) to fund a check.
The attorney asked, "Is it the bank policy to first transfer the actual cash value from the alleged borrower to the lender for the amount of the alleged loan?"
The banker said, "Yes."
The attorney asked, "Does the bank pay IRS tax on the actual cash value transferred from the alleged borrower to the bank?"
The banker answered, "No, because the actual cash value transferred shows up like a loan from the borrower to the bank, or a deposit which is the same thing, so it is not taxable."
The attorney asked, "If a loan is forgiven, is it taxable?"
The banker agreed by saying, "Yes."
The attorney asked, "Is it the bank policy to not return the actual cash value that they received from the alleged borrower unless it is returned as a loan from the bank to the alleged borrower?"
"Yes", the banker replied.
The attorney said, "You never pay taxes on the actual cash value you receive from the alleged borrower and keep as the bank's property?"
"No. No tax is paid.", said the crying banker.
The attorney asked, "When the lender receives the actual cash value from the alleged borrower, does the bank claim that it then owns it and that it is the property of the lender, without the bank loaning or risking one cent of legal tender or other depositors' money?"
The banker said, "Yes."
The attorney asked, "Are you telling me the bank policy is that the bank owns the promissory note (actual cash value) without loaning one cent of other depositors' money or legal tender, that the alleged borrower is the one who provided the funds deposited to fund the bank loan check, and that the bank gets funds from the alleged borrower for free? Is the money then returned back to the same person as a loan which the alleged borrower repays when the bank never gave up any money to obtain the promissory note? Am I hearing this right? I give you the equivalent of $50,000, you return the funds back to me, and I have to repay you $50,000 plus interest? Do you think I am stupid?"
In a shaking voice the banker cried, saying, "All the banks are doing this. Congress allows this."
The attorney quickly responded, "Does Congress allow the banks to breach written agreements, use false and misleading advertising, act without written permission, authorization, and without the alleged borrower's knowledge to transfer actual cash value from the alleged borrower to the bank and then return it back as a loan?"
The banker said, "But the borrower got a check and the house."
The attorney said, "Is it true that the actual cash value that was used to fund the bank loan check came directly from the borrower and that the bank received the funds from the alleged borrower for free?"
"It is true", said the banker.
The attorney asked, "Is it the bank's policy to transfer actual cash value from the alleged borrower to the bank and then to keep the funds as the bank's property, which they loan out as bank loans?"
The banker, showing tears of regret that he had been caught, confessed, "Yes."
The attorney asked, "Was it the bank's intent to receive actual cash value from the borrower and return the value of the funds back to the borrower as a loan?"
The banker said, "Yes." He knew he had to say yes because of the bank policy.
The attorney asked, "Do you believe that it was the borrower's intent to fund his own bank loan check?"
The banker answered, "I was not there at the time and I cannot know what went through the borrower's mind."
The attorney asked, "If a lender loaned a borrower $10,000 and the borrower refused to repay the money, do you believe the lender is damaged?"
The banker thought. If he said no, it would imply that the borrower does not have to repay. If he said yes, it would imply that the borrower is damaged for the loan to the bank of which the bank never repaid. The banker answered, "If a loan is not repaid, the lender is damaged."
The attorney asked, "Is it the bank policy to take actual cash value from the borrower, use it to fund the bank loan check, and never return the actual cash value to the borrower?"
The banker said, "The bank returns the funds."
The attorney asked, "Was the actual cash value the bank received from the alleged borrower returned as a return of the money the bank took or was it returned as a bank loan to the borrower?"
The banker said, "As a loan."
The attorney asked, "How did the bank get the borrower's money for free?"
The banker said, "That is how it works."
_______________________________
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Success to all,
THE TRUTH ABOUT YOUR MORTGAGE BANKER NO ONE TOLD YOU OR DISCLOSED TO YOU WHICH IS LEGAL REQUIREMENT???
SOME OF YOU MAY KNOW THIS, MANY DON'T.
SHARE TO ENLIGHTEN THOSE WHO DO NOT KNOW.
You can not longer keep your head in the sand after this!
For those that really have wondered how a loan works in a fiat currency debt based banking system here it is. Some may be amazed and feel that of a dupe and others are already very aware that this is how it is. More and more people are waking up to this and starting to question business as usual.
It Really Works Like This -- No Joke
This is the way a "bank loan" really works.
Interviews with bankers about a foreclosure. The banker was placed on the witness stand and sworn in. The plaintiff's (borrower's) attorney asked the banker the routine questions concerning the banker's education and background.
The attorney asked the banker, "What is court exhibit A?"
The banker responded by saying, "This is a promissory note."
The attorney then asked, "Is there an agreement between Mr. Smith (borrower) and the defendant?"
The banker said, "Yes."
The attorney asked, "Do you believe the agreement includes a lender and a borrower?"
The banker responded by saying, "Yes, I am the lender and Mr. Smith is the borrower."
The attorney asked, "What do you believe the agreement is?"
The banker quickly responded, saying, " We have the borrower sign the note and we give the borrower a check."
The attorney asked, "Does this agreement show the words borrower, lender, loan, interest, credit, or money within the agreement?"
The banker responded by saying, "Sure it does."
The attorney asked, `"According to your knowledge, who was to loan what to whom according to the written agreement?"
The banker responded by saying, "The lender loaned the borrower a $50,000 check. The borrower got the money and the house and has not repaid the money."
The attorney noted that the banker never said that the bank received the promissory note as a loan from the borrower to the bank. He asked, "Do you believe an ordinary person can use ordinary terms and understand this written agreement?"
The banker said, "Yes."
The attorney asked, "Do you believe you or your company legally own the promissory note and have the right to enforce payment from the borrower?"
The banker said, "Absolutely we own it and legally have the right to collect the money."
The attorney asked, "Does the $50,000 note have actual cash value of $50,000? Actual cash value means the promissory note can be sold for $50,000 cash in the ordinary course of business."
The banker said, "Yes."
The attorney asked, "According to your understanding of the alleged agreement, how much actual cash value must the bank loan to the borrower in order for the bank to legally fulfill the agreement and legally own the promissory note?"
The banker said, "$50,000."
The attorney asked, "According to your belief, if the borrower signs the promissory note and the bank refuses to loan the borrower $50,000 actual cash value, would the bank or borrower own the promissory note?"
The banker said, "The borrower would own it if the bank did not loan the money. The bank gave the borrower a check and that is how the borrower financed the purchase of the house."
The attorney asked, "Do you believe that the borrower agreed to provide the bank with $50,000 of actual cash value which was used to fund the $50,000 bank loan check back to the same borrower, and then agreed to pay the bank back $50,000 plus interest?"
The banker said, "No. If the borrower provided the $50,000 to fund the check, there was no money loaned by the bank so the bank could not charge interest on money it never loaned."
The attorney asked, "If this happened, in your opinion would the bank legally own the promissory note and be able to force Mr. Smith to pay the bank interest and principal payments?"
The banker said, "I am not a lawyer so I cannot answer legal questions."
The attorney asked, " Is it bank policy that when a borrower receives a $50,000 bank loan, the bank receives $50,000 actual cash value from the borrower, that this gives value to a $50,000 bank loan check, and this check is returned to the borrower as a bank loan which the borrower must repay?"
The banker said, "I do not know the bookkeeping entries."
The attorney said, "I am asking you if this is the policy."
The banker responded, "I do not recall."
The attorney again asked, "Do you believe the agreement between Mr. Smith and the bank is that Mr. Smith provides the bank with actual cash value of $50,000 which is used to fund a $50,000 bank loan check back to himself which he is then required to repay plus interest back to the same bank?"
The banker said, " I am not a lawyer."
The attorney said, "Did you not say earlier that an ordinary person can use ordinary terms and understand this written agreement?"
The banker said, "Yes."
The attorney handed the bank loan agreement marked "Exhibit B" to the banker. He said, "Is there anything in this agreement showing the borrower had knowledge or showing where the borrower gave the bank authorization or permission for the bank to receive $50,000 actual cash value from him and to use this to fund the $50,000 bank loan check which obligates him to give the bank back $50,000 plus interest?"
The banker said, "No."
The lawyer asked, "If the borrower provided the bank with actual cash value of $50,000 which the bank used to fund the $50,000 check and returned the check back to the alleged borrower as a bank loan check, in your opinion, did the bank loan $50,000 to the borrower?"
The banker said, "No."
The attorney asked, "If a bank customer provides actual cash value of $50,000 to the bank and the bank returns $50,000 actual cash value back to the same customer, is this a swap or exchange of $50,000 for $50,000."
The banker replied, "Yes."
The attorney asked, "Did the agreement call for an exchange of $50,000 swapped for $50,000, or did it call for a $50,000 loan?"
The banker said, "A $50,000 loan."
The attorney asked, "Is the bank to follow the Federal Reserve Bank policies and procedures when banks grant loans."
The banker said, "Yes."
The attorney asked, "What are the standard bank bookkeeping entries for granting loans according to the Federal Reserve Bank policies and procedures?" The attorney handed the banker FED publication Modern Money Mechanics, marked "Exhibit C".
The banker said, "The promissory note is recorded as a bank asset and a new matching deposit (liability) is created. Then we issue a check from the new deposit back to the borrower."
The attorney asked, "Is this not a swap or exchange of $50,000 for $50,000?"
The banker said, "This is the standard way to do it."
The attorney said, "Answer the question. Is it a swap or exchange of $50,000 actual cash value for $50,000 actual cash value? If the note funded the check, must they not both have equal value?"
The banker then pleaded the Fifth Amendment.
The attorney asked, "If the bank's deposits (liabilities) increase, do the bank's assets increase by an asset that has actual cash value?"
The banker said, "Yes."
The attorney asked, "Is there any exception?"
The banker said, "Not that I know of."
The attorney asked, "If the bank records a new deposit and records an asset on the bank's books having actual cash value, would the actual cash value always come from a customer of the bank or an investor or a lender to the bank?"
The banker thought for a moment and said, "Yes."
The attorney asked, "Is it the bank policy to record the promissory note as a bank asset offset by a new liability?"
The banker said, "Yes."
The attorney said, "Does the promissory note have actual cash value equal to the amount of the bank loan check?"
The banker said "Yes."
The attorney asked, "Does this bookkeeping entry prove that the borrower provided actual cash value to fund the bank loan check?"
The banker said, "Yes, the bank president told us to do it this way."
The attorney asked, "How much actual cash value did the bank loan to obtain the promissory note?"
The banker said, "Nothing."
The attorney asked, "How much actual cash value did the bank receive from the borrower?"
The banker said, "$50,000."
The attorney said, "Is it true you received $50,000 actual cash value from the borrower, plus monthly payments and then you foreclosed and never invested one cent of legal tender or other depositors' money to obtain the promissory note in the first place? Is it true that the borrower financed the whole transaction?"
The banker said, "Yes."
The attorney asked, "Are you telling me the borrower agreed to give the bank $50,000 actual cash value for free and that the banker returned the actual cash value back to the same person as a bank loan?"
The banker said, "I was not there when the borrower agreed to the loan."
The attorney asked, "Do the standard FED publications show the bank receives actual cash value from the borrower for free and that the bank returns it back to the borrower as a bank loan?"
The banker said, "Yes."
The attorney said, "Do you believe the bank does this without the borrower's knowledge or written permission or authorization?"
The banker said, "No."
The attorney asked, "To the best of your knowledge, is there written permission or authorization for the bank to transfer $50,000 of actual cash value from the borrower to the bank and for the bank to keep it for free?
The banker said, "No."
Does this allow the bank to use this $50,000 actual cash value to fund the $50,000 bank loan check back to the same borrower, forcing the borrower to pay the bank $50,000 plus interest? "
The banker said, "Yes."
The attorney said, "If the bank transferred $50,000 actual cash value from the borrower to the bank, in this part of the transaction, did the bank loan anything of value to the borrower?"
The banker said, "No." He knew that one must first deposit something having actual cash value (cash, check, or promissory note) to fund a check.
The attorney asked, "Is it the bank policy to first transfer the actual cash value from the alleged borrower to the lender for the amount of the alleged loan?"
The banker said, "Yes."
The attorney asked, "Does the bank pay IRS tax on the actual cash value transferred from the alleged borrower to the bank?"
The banker answered, "No, because the actual cash value transferred shows up like a loan from the borrower to the bank, or a deposit which is the same thing, so it is not taxable."
The attorney asked, "If a loan is forgiven, is it taxable?"
The banker agreed by saying, "Yes."
The attorney asked, "Is it the bank policy to not return the actual cash value that they received from the alleged borrower unless it is returned as a loan from the bank to the alleged borrower?"
"Yes", the banker replied.
The attorney said, "You never pay taxes on the actual cash value you receive from the alleged borrower and keep as the bank's property?"
"No. No tax is paid.", said the crying banker.
The attorney asked, "When the lender receives the actual cash value from the alleged borrower, does the bank claim that it then owns it and that it is the property of the lender, without the bank loaning or risking one cent of legal tender or other depositors' money?"
The banker said, "Yes."
The attorney asked, "Are you telling me the bank policy is that the bank owns the promissory note (actual cash value) without loaning one cent of other depositors' money or legal tender, that the alleged borrower is the one who provided the funds deposited to fund the bank loan check, and that the bank gets funds from the alleged borrower for free? Is the money then returned back to the same person as a loan which the alleged borrower repays when the bank never gave up any money to obtain the promissory note? Am I hearing this right? I give you the equivalent of $50,000, you return the funds back to me, and I have to repay you $50,000 plus interest? Do you think I am stupid?"
In a shaking voice the banker cried, saying, "All the banks are doing this. Congress allows this."
The attorney quickly responded, "Does Congress allow the banks to breach written agreements, use false and misleading advertising, act without written permission, authorization, and without the alleged borrower's knowledge to transfer actual cash value from the alleged borrower to the bank and then return it back as a loan?"
The banker said, "But the borrower got a check and the house."
The attorney said, "Is it true that the actual cash value that was used to fund the bank loan check came directly from the borrower and that the bank received the funds from the alleged borrower for free?"
"It is true", said the banker.
The attorney asked, "Is it the bank's policy to transfer actual cash value from the alleged borrower to the bank and then to keep the funds as the bank's property, which they loan out as bank loans?"
The banker, showing tears of regret that he had been caught, confessed, "Yes."
The attorney asked, "Was it the bank's intent to receive actual cash value from the borrower and return the value of the funds back to the borrower as a loan?"
The banker said, "Yes." He knew he had to say yes because of the bank policy.
The attorney asked, "Do you believe that it was the borrower's intent to fund his own bank loan check?"
The banker answered, "I was not there at the time and I cannot know what went through the borrower's mind."
The attorney asked, "If a lender loaned a borrower $10,000 and the borrower refused to repay the money, do you believe the lender is damaged?"
The banker thought. If he said no, it would imply that the borrower does not have to repay. If he said yes, it would imply that the borrower is damaged for the loan to the bank of which the bank never repaid. The banker answered, "If a loan is not repaid, the lender is damaged."
The attorney asked, "Is it the bank policy to take actual cash value from the borrower, use it to fund the bank loan check, and never return the actual cash value to the borrower?"
The banker said, "The bank returns the funds."
The attorney asked, "Was the actual cash value the bank received from the alleged borrower returned as a return of the money the bank took or was it returned as a bank loan to the borrower?"
The banker said, "As a loan."
The attorney asked, "How did the bank get the borrower's money for free?"
The banker said, "That is how it works."
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