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OpEdNews Op Eds    H2'ed 2/6/12

Attorney Generals: Do NOT settle with Banks!

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To the Honorables: U.S Attorney General Eric Holder, Massachusetts Attorney General Martha Coakley, New York Attorney General Eric Schneiderman and California Attorney General Kamala Harris and the other 47 Attorney Generals throughout the states.

Do NOT settle with the banks about the foreclosure crisis in America as this is NOT a way forward for the economic problem facing many Americans. A way forward is stated emphatically in A Way Forward by the New America Foundation, October 2011, where on page 19 it specifically states the "only effective" means of economic recovery is a program of working with borrowers on restructuring and a massive forgiveness of debt for homeowners.

To me, the ONLY EFFECTIVE way that we will have MASSIVE forgiveness of homeowner's mortgage debt is when the multi-state legal settlement over improper foreclosure activity by major banks puts all the evidence on the table. One such piece of evidence that I would like to put forth is one that exposes and comes to the bottom of the rabbit hole is the realization that the banks and lawyers conspired together at the conception of the mortgage loan to lead the borrowers into believing, by using legalese and deception, that the banks loaned them real money! Let me make this clear, in my opinion: BANKS DO NOT LEND MONEY! However, Scott Baker, Senior Editor of Opednews opines: "The statement 'BANKS DO NOT LEND MONEY!' is not quite true. Banks do lend money - it's just that they don't lend depositor's money, they simply create new money whenever they make a loan. It's this private outsourcing of the money-creation power + human greed and ignorance/stupidity that creates our bubble/crashes, over and over."

Below is the simple key to unlock the complex quagmire of why we have fraudulent loans, clouded titles, false assignments, false affidavits, forged endorsements by robo-signers, unverifiable securitizations, unfunded trusts, non-compliance with pooling and service agreements and illegal secondary market transfers of mortgages, all leading to unfair foreclosures on the ill-fated homeowner who can hardly understand the law or who can afford a lawyer to protect him or her.  

The key secret is: banks do not lend any cash money per se, (like you and I might loan each other $100), what they have done is scheme to facilitate the borrower's credit into newly created money without informing the borrower of that fact. In other words, it's the borrowers who create "NEW" money to increase the prosperity of all. AND it's the banks who have unjustly been enriching themselves by this fraud for hundreds of years!

A contract between two parties must exchange something of value, have full disclosure, and requires:

An Offer: A Bank offers to loan $100,000 for 30 years if you agree to pay back $250,000 i.e. $100,000 plus interest.

An Acceptance: A unknowing homeowner agrees with the help of his or the bank's lawyers.

Consideration: The value received and given - the $250,000 payback by the borrower and the $100,000 initial loan by the bank.

Any legally recognized offer and an acceptance create a "meeting of the minds", or mutual assent, between the parties. The law requires the parties to sign a contract to demonstrate mutual assent to the contract's terms.

For a "meeting of the minds", I have chosen Timothy Madden's words: "The nominal mortgage, by its terms, is deliberately constructed/drafted as a constructive and actual wager. The nominal debtor/borrower's acceptance of that wager severs their legal and equitable claim to ownership of the mortgage as chattel, and the legal right of property in it defaults to the banker by bare possession.

The purpose of the solicitor in the transaction is to induce the nominal debtor to commit a strict liability felony offence so as to forfeit their rights to recover against the banker's fraud in a court of equity jurisdiction. The parties are no long perpetrator and victim, but particeps criminis or "partners in crime" under the law. The constructive deal going in is that the banker says to the prospective nominal borrower: "I will advance you $X of credit provided that you agree to first objectively falsify and deliver nominal securities that are constructive forgeries in law, so that you cannot later sue me to recover for the fraud that I am committing against you and which you have been carefully mal-educated not to understand."

Timothy Madden is an economist and expert in banking and credit.   He is described by Paul Grignon, the producer of Money as Debt I and II, as "Canada's foremost authority on deceptive accounting practices of financial institutions."

As for the consideration in the contract I refer you to the WEB OF DEBT by Ellen Brown where in the 1968 court Case of Montgomery vs. Daly, the Judge's ruling stated: "Plaintiff admitted that it, in combination with the federal Reserve Bank of Minneapolis, which are for all practical purposes, because of their interlocking activity and practices, and both being Banking Institutions Incorporated under the Laws of the United States, are in the Law to be treated as one and the same Bank, did create the entire $14,000.00 in money or credit upon its own books by bookkeeping entry. That this was the Consideration used to support the Note dated May 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note. See Ansheuser-Busch Brewing Company v. Emma Mason, 44 Minn. 318, 46 N.W. 558.   The Jury found that there was no consideration and I agree.  Only God can create something of value out of nothing." December 9, 1968 Justice Martin V. Mahoney, Credit River Township, Scott County, Minnesota.

Ellen Brown is an attorney and president of the Public Banking Institute, In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are and

Together the banks and lawyers literally and figuratively "steal" the borrower's promise to pay by creating a fraudulent loan document in a few ways and then later by an illegal bifurcation (splitting the note and the deed) and securitizing that falsified negotiable security. The negotiable security is not really theirs to sell. But, upon its sale, the (MBS) Mortgaged Backed Securities seem real but are truly falsified documents and have been used to deceive investors and used to foreclose on unsuspecting homeowners!

The bank is really only an accounting shop keeping track of the debits and credits of their customers and should not gain by charging interest on money they didn't have! And then they have the gall to keep ALL the money created by the buying and selling of the tangible security that is NOT theirs. A part of the financial gain should go to the 99% borrower/homeowner for providing the intangible income stream instead of the ill-legal Ponzi scheme they have created for the 1%! 

Scott Fullwiler, Ph.D. is Associate Professor of Economics and James A. Leach Chair in Banking and Monetary Economics at Wartburg College, Research Associate at the Center for Full Employment and Price Stability, and Director of the Social Entrepreneurship Program at Wartburg College. His research expertise is in: central bank operations, Treasury operations, and monetary economics.

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