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"The people who cast the votes don't decide an election; the people who COUNT the votes do." -- Joseph Stalin

Friday, November 27, 2009

How You Have Been Conned on Your Mortgage

The articles by The Candid Blogger about The Great American Mortgage Scam and the Follow-up to the Great American Mortgage Scam have brought a huge amount of traffic to this site and, judging from many of the responses, has generated some confusion among our visitors. We are taking this opportunity to provide a simple explanation.

How Mortgages are SUPPOSED to work – this is what SHOULD happen:

You sign a promissory note and the bank gives you the “money”.
You then use that “money” to buy the house.
The bank still fractionalizes the promissory note and turns the $100,000 into $900,000.
The bank then pays the taxes on the $900,000.

That is the understanding that is common to the American public about the real estate purchase process. One minor problem:


Pay attention, Mr. and Mrs. America. You are about to receive a lesson in how the banks con America. PAY CLOSE ATTENTION!

How a mortgage REALLY works

When a mortgage is created, your signature on the promissory note creates the funds. They did not exist before then.

The lender does not transfer “money” – they simply make bookkeeping entries.

The promissory note creates an Accounts Receivable with your name on it and that’s what you pay month after month after month.

The promissory note also creates an Accounts Payable with your name on it. But you never see that account. It’s the account that owes you money.

Did the lender give you the money when you signed the promissory note? Of course not. They “withheld” it from you.

The bank then fractionalizes the promissory note.
Example: A promissory note for $100,000 becomes $1,000,000 when the bank fractionalizes it.

The bank also sells the promissory note. This repays the Accounts Receivable.

The Accounts Payable is not abandoned funds. The bank is suppose to send the borrower an IRS 1099A, Notice of Abandonment, but they don’t.

When you make a monthly payment to the bank, you are actually paying the TAX the bank owes the IRS for the money YOU created, PLUS interest.

Here is one more bit of information of which you were probably not aware:

Foreclosures DO NOT hurt banks in any way. They never risked anything for the creation of the “money” and they never lend any “money”. The “money” is created from your signature.

When you sign a mortgage note it comes under UCC Article 3. After securitization, it comes under Article 8. Under US law securitization is illegal because it is fraudulent. Instruments such as loans, credit cards and receivables, are securitized. Enron was involved in securitization and someone brought charges against them. But almost all large corporations are doing it as usual business, including the banking system and the government.

Under the constitution, the government was not given authority to create money. It is a power reserved by the people. Article I, section 10 restricted the states from making gold coins. So the corporate government has to rely on the deception of people to create money. So the way money is created is to have people sign an IOU, or promissory note. It is not a debt instrument to the one who created it; it is actually an asset. The creator can pass it on for someone else to use. It is negotiable unless it includes terms and conditions as part of a contract. The property belongs to the creator, and the holder is merely using it and any proceeds that come from it should be restored to the creator.

That is the power we have if we realize we have the authority to do this. The intent is to understand the regulations and to see how they are trying to deceive us to believe we are the debtor and the slave and they are the creditor at all times. This is not legally true.

In these recent articles, we have informed you of:

1. how banks create money out of thin air on your signature alone;

2. how they make 10X that amount from just your signature;

3. how they fail to pay you money to which you are legally entitled;

4. how they obtain title to your property illegally by failing to follow through on the Reconveyance required by your Deed of Trust;

5. and how they con you into paying THEIR taxes owed to the IRS in this transaction.

What you do with this information is up to you.

This presentation explores how money is created and issued. Money used to be backed by Gold and Silver but today's money is backed by debt - your promise to pay back a loan and the government's promise to back up the currency.

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  1. Hello, Candid. I know this is the "simple explanation," but I'm still confused. In your "what SHOULD happen" items, you write:
    1. You sign a promissory note and the bank gives you the “money”.
    2. You then use that “money” to buy the house.

    But in your "How a mortgage REALLY works" I don't see the Step 2 there. Where is the money that goes to pay the guy that sold me the house? That would be the Accounts Payable that the bank created, no? And as you say I don't even see that money -- because it goes to the seller of the house... But then I don't follow your "abandoned funds" remarks.

    What did I miss?

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