Do we fully understand mortgages?

the_worm_that_turned

I have been learning about mortgages and how they work for quite a few years now and it has been interesting to say the least.

In that time I have seen countries reach the verge of bankruptcy and then bail the banks out to the tune of trillions. I still don't even pretend to understand how it came to this but I am beginning to understand the involvement of mortgages and how we really are NOT told the full story.

From personal experience I know that banks (or at least mine) are very cagey when it comes to answering questions about mortgages.

There are two distinct parts to the mortgage and both have a lot of hidden information and meanings.

The loan offer is purely that - an offer. However in my example there is no mention of money actually being offered to me. There is mention of me paying back a certain amount + interest but there is nothing in black & white about me receiving money whatsoever.

You might say - ah yes but you got the house didn't you? Well that is true, but at a price. I had to include the bank as first charge on the property via a deed.

Let's consider for one minute that the bank didn't actually lend me any money. Instead they acquired the house and provided it to me in exchange for a promissory note (a signed document whereby I promise to pay the bank an amount equivalent to the supposed loan + interest).

That promissory note (note) is legal tender and is also known as a bill of exchange. The bank can pool/bundle this together with other notes into securitised investment instruments. These can then be used to attract investors (with a guaranteed return - say 8%) and in return the bank can actually make even more money off the back of my signature. This isn't la la land talk, this is fact and is linked to the supposed credit crunch/recession (soon to be depression). Different story though. In addition, and quite possibly linked, the banks can sell on the note(s) and make a tidy profit. This is not illegal but is certainly not disclosed up front.

So, thus far, I have promised to pay the bank and in exchange I have become the legal owner (title holder) of the house. They have provided me a house (somehow) and it could be argued that they provided me with the money to purchase the house, but I have no evidence whatsoever to support this.

So is it possible that using money created from earlier pooled/bundled investment opportunities (or from my note and others) they purchased/acquired my house and offered it to me in exchange for the note?

This then leads us to the Mortgage Deed, which sets up a trust (by deed). I will continue this tomorrow but in short, a trust requires a trustee and a beneficiary. The bank appears to be the trustee and a beneficiary and I am merely the trustee with no benefit. Is this even possible under the complex law surrounding trusts?

Lots more to discuss so please comment here as I think there is SO much more than meets the eye with regards to mortgages in England and Wales (and no doubt Scotland, Ireland and other countries such as US and Canada).

(tired) Wormy

opinions4u

Your point is?

Nixxx

Perhaps you could post this in the debate section for discussion.

benjo

the_worm_that_turned wrote: »

The loan offer is purely that - an offer. However in my example there is no mention of money actually being offered to me. There is mention of me paying back a certain amount + interest but there is nothing in black & white about me receiving money whatsoever.


Let's consider for one minute that the bank didn't actually lend me any money. Instead they acquired the house and provided it to me in exchange for a promissory note (a signed document whereby I promise to pay the bank an amount equivalent to the supposed loan + interest).


(tired) Wormy

You might have no evidence that the bank lent you the money. But when you buy my house, I have the evidence of the money they lent you sitting in my bank.

I'm not sure what your point is above, if they 'didnt actually lend you any money' then where does the cash sitting in my bank come from when I sell my house?

Do we fully understand mortgages - I doubt it :cool:

the_worm_that_turned

Nixxx wrote: »

Perhaps you could post this in the debate section for discussion.

Where is that? Is this not a place for discussion then?

ILW

Is it the Illuminati again?

Nixxx

the_worm_that_turned wrote: »

Where is that? Is this not a place for discussion then?

Nearly all boards are places for discussion, I just think that you may receive a more fruitful response if you go to the Debate House Prices and the Economy boad.

the_worm_that_turned

benjo wrote: »

You might have no evidence that the bank lent you the money. But when you buy my house, I have the evidence of the money they lent you sitting in my bank.

I'm not sure what your point is above, if they 'didnt actually lend you any money' then where does the cash sitting in my bank come from when I sell my house?

Do we fully understand mortgages - I doubt it :cool:

When I buy your house you have money that appears in your account. It hasn't come from me directly has it? Can it be shown? No, some money goes into a solicitors account and then it gets sent to you.

That's not really the point though. The point (in relation to the note) is that it is your signature on a promissory note that appears from my research to CREATE the money. Your promise to pay the bank can be sold on to other institutions for profit because don't forget that banks only need a certain amount of money in their reserves to enable them to loan (create) more money. It's called fractional reserve banking and yes it is totally real and totally a recipe for disaster. As evidenced by the total global economic failure at present.

So in effect you may have performed on your "contract" regarding the note and all you have really done (as in the case of my loan offer/promissory note) is agreed to pay back money in return for the bank providing a facility. There is no mention of them loaning me money in the agreement/contract!!

the_worm_that_turned

ILW wrote: »

Is it the Illuminati again?

Is what the illuminati again?

redpete

the_worm_that_turned wrote: »

...but there is nothing in black & white about me receiving money whatsoever...

You seem to have created a world view that excludes part of the world (the person who you buy the property from and who receives the money that you have been loaned). You can't build an argument (whatever the argument is) on an incomplete view of the system you are discussing.

Feel free not to continue this when you have got over your tiredness.

the_worm_that_turned

redpete wrote: »

You seem to have created a world view that excludes part of the world (the person who you buy the property from and who receives the money that you have been loaned). You can't build an argument (whatever the argument is) on an incomplete view of the system you are discussing.

Feel free not to continue this when you have got over your tiredness.

See post two above by me. I am not doubting that a seller receives money. What I do question is where that money has come from and how it was formed.

I would question your world view actually and urge you to consider other possibilities.

If you feel uncomfortable reading my posts then don't but please don't try and be clever with me as I find it offensive.