HOW TO EXPOSE BANK LOAN FRAUD

Описание: On page 6 of Modern Money Mechanics, the Federal Reserve Bank of Chicago tells us that the banks DO NOT "pay out" the funds for loans from money they received from other depositor's accounts.

What they do is "accept" promissory notes in "exchange" for, credits to the "borrower's" transaction accounts - called "liabilities."

Can the bank legally create money? You bet. If anyone ever asks you if it is legal for the banks to create money, the answer is yes. By the transactional method of mere "bookkeeping" entries (debits and credits), the bank is able to create money (or what is called money today.) And here's how they do it.

When the bank receives a deposit of funds, either in Federal Reserve notes (cash) or some other form of a promise to pay, like a "check", or a "promissory note", they will open a "demand deposit account", or make a deposit in an account already opened, in the name of the "depositor."

Once the bank obtains that promise to pay, they own it. It's theirs. It is how they obtained that "promissory note, and how they "create money" with that "promise to pay", that is of special interest to you.

The following is the example from the fed publication, Modern Money Mechanics, and reflects a typical bank deposit transaction.

BANKING TODAY

CHECKING ACCOUNT
(Deposit)

Assets Liabilities

$9,000 $9,000

For every deposit entry on the "asset" side of the ledger, there must be a corresponding and matching "liability" entry. The liability is there because it is a Demand Deposit Account, which means you could withdraw it all at any time. The two ledgers, "assets" and Liabilities" must always balance out to "zero."

At this point, the new money has been created, but it is not in circulation. The bank has it in a Demand Deposit Account. If you have opened a checking account, you may write checks on that account, and buy goods or services. When the person to whom you wrote the check, deposits that check in their Demand Deposit Account, at their bank, that account is credited for the amount on the face of the check. The check you wrote (your promise to pay), is returned to your bank, and the Demand Deposit Account, that has your name and the Account Number attached to it, will be debited, for the amount you assigned to the check. THIS IS KNOWN AS THE "TRANSACTION" CONCEPT OF MONEY You take it to the bank, deposit it, bank has an asset and a liability, and the bank balance is "zero."

Modern Money Mechanics tells us, if the banks were to take their own money, or other depositor's money, and loan it to you, they would never be able to create any "new" money and birth it into the economy. So, they are allowed to take your note, (which is new money, based on your promise to pay), and birth it, into the economy through, they're access to the, clearing houses for negotiable instruments, and loan you "credit."

You go to the bank and ask to apply for a loan. Can the bank loan you they're own money (assets)? No. Can the bank loan you the other depositor's money (credits in a Demand Deposit Account)? Well, they could, if they requested and received written permission of every single depositor, from whose account they would be using to make the loan. But that would defeat the effort to create new money, since they would just be recycling a certain amount of currency. So, the answer is, no.

So, here is what they do. For purposes of this example, we will use $100,000, but the principle used in the 'checking" (Demand Deposit Account) above, is the same. Your application for a loan is approved and you begin signing all the paperwork. Once you have signed the Promissory Note, the bank will make a book entry of a deposit into a bank Demand Deposit Account in the amount of your note, and show that amount as an "asset" to the bank. Remember there must be a corresponding and matching ledger entry as a liability. The loan is for $100,000. On the books of the bank, the establishment of the loan transaction would look similar to that of the checking account.
There would be a deposit for $100,000 (your promissory note), and a matching ledger liability book entry of $100,000 (the numerical face amount of your note).

You will have to decide if there is fraud here. But, if you get a Complaint to Foreclose your Mortgage and you do not answer and dispute every allegation, then you must counterclaim. What do you think a good counterclaim might be?

Or, should you answer and dispute every claim, and deny there was a valid contract, because the contract was constructed by fraud and is void ab initio, and counterclaim for fraud?

#Bankfraud #Bankloanfraud #Mortgagefraud

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