Do we fully understand mortgages?

the_worm_that_turned

kmmr wrote: »

I mean customers say - how come I am being charged 5%, when the bank gets the money at 0.5%! And they are wrong... cause the bank isn't.... oh dear, something didn't come through in my comments!

d'oh.

Do you or any others here actually believe that the bank provides the debtor with money that sits in their vaults or even sits as an asset on their books?

If you do then I really do think I am wasting my time discussing these topics on the Money Saving Expert website.

Incidentally, all I am attempting to do is save money by not being ripped off (if that is what is occurring) by a bank that claims to have suffered a loss (genuine negative amount on their books) to provide me with a loan of money.

It is my belief that the bank takes my signed promissory note and declares it as an asset on its books. Then in return loans an equal amount (plus no doubt making more money by selling the promissory note) and then collects on the loan with interest. Is that fair?

Oh and if the interest rate goes up they take more money from me and I risk losing my house if I can't afford it.

Then don't forget when they are struggling we all bail them out for 600 billion pounds.

Come on people. Think of the future and our kids and grand kids!

the_worm_that_turned

antrobus wrote: »

Do we fully understand mortgages?

As far as the OP is concerned, the answer is clearly 'no'.

(I do like the easy questions.)

Please enlighten us then Antrobus. And please don't quote from Wikipedia

kmmr

http://vimeo.com/3261363?pg=embed&sec=&hd=1

This is a little bit old, but a good start.

the_worm_that_turned

kmmr wrote: »

http://vimeo.com/3261363?pg=embed&sec=&hd=1

This is a little bit old, but a good start.

Good video that explains how fractional reserve banking has totally messed up the global economy. Have lessens been learnt? I doubt it because banks can still do it, there is still fiat currency everywhere, governments are making the people suffer to bail out (rescue) the banks and economies.

However, I'm questioning the actual legitimacy of loan offer (contracts) and mortgage deed (contracts by deed).

GMS

Assuming you prove all mortgage loans to be illegitimate, unenforceable, theft or whatever else you want to do what do you think the consequences will be?

For somebody in negative equity it may well be a dream scenario. Unlawful loan meaning thrown out and client returned to financial position as was. Possibility of no mortgage, negative shortfall removed, deposit returned and free to look elsewhere for a property. Great result.

However consider this scenario. Retired couple, mortgage paid off, but apparantly illegaly executed. Can the lender then repay the deposit and take back the security as this should never have been allowed? 300k of assets removed for return of a 5k deposit.

If one is allowed then the other becomes a possibility.

Funds are advanced from the lender, the mortgagor agrees to the deal and pays back accordingly. Either party can have the security subject to meeting or breaking the terms.

What exactly do you want to prove/achieve?

ILW

the_worm_that_turned wrote: »

Good video that explains how fractional reserve banking has totally messed up the global economy. Have lessens been learnt? I doubt it because banks can still do it, there is still fiat currency everywhere, governments are making the people suffer to bail out (rescue) the banks and economies.

However, I'm questioning the actual legitimacy of loan offer (contracts) and mortgage deed (contracts by deed).

In what way are governments making people suffer?

antrobus

the_worm_that_turned wrote: »

Please enlighten us then Antrobus. And please don't quote from Wikipedia

Well you could try reading some books. Nevermind, if I get some time i might see what I can do in terms of a basic banking primer.

(Me quote from Wikipedia? Of all the 6 billion or so people on this planet I am probably the least likely to quote from Wikipedia.)

antrobus

the_worm_that_turned wrote: »

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).

Otherwise known as hire purchase and is in fact the way that so-called Islamic banking finances property.

the_worm_that_turned

antrobus wrote: »

Otherwise known as hire purchase and is in fact the way that so-called Islamic banking finances property.

Good to hear you don't quote from Wikipedia.

As for Islamic banking and hire purchase, we are not operating Islamic banking. We are operating fiat currency (debt) accounting or if you will money of account. The bank pretend that they are lending you real money to buy your house, which unless you have proof to show me that they are, then they are not.

It is imo a scam to continue the system, as it can only continue to operate if we and the country remain in debt. Austerity measures are pure BS and all that ever occurs is money moves from one area to another (i.e. no matter how bad times are, someone will be get rich). Debt is never paid off because it cannot be. Fiat currency = nothing backing the promissory notes (IOUs) issued by the BOE, other than the populace's sweat and blood through labour. We are the creditors of the entire system.

Sorry to shatter anyone's illusion of how banking and global economies work.

My advice to everyone is never borrow from banks or credit card companies again as ultimately it is you that creates that "borrowing" in the first place!

Xiderpunk

The OP is essentially correct, money is 'created' through debt. However the legality is beyond any question legal by it's definition as fiat currency. The banks operate within the constraints the governments around the world allow them too.

Yes the system is wrong (almost ludicrous!), but the world can not change the system. The modern world has committed itself to this system until natural resources can no longer support it. The only way money can revert to being backed by something would be when there is no other alternative. IMHO anyway.