Mortgages are illegal?

Goldiegirl

I feel like I've entered the Twilight Zone

Yorkie1

The bank has a positive credit on its balance sheet (savers' deposits, whatever else).

The bank does not actually hold that credit in physical money. It is noted on a balance sheet and (for the money deposits at least) in a bank account.

The bank owns the credit in that bank account. The credit is called a 'chose in action'. It means the bank has the right to call upon that credit when it chooses.

When money transfers from one account to another (e.g. from the bank to a customer or mortgage borrower), a chose in action is debited from the sending account and credited to the new account. So, something capable of being owned exists (unlike being created from thin air).

Payments or repayments just work on this basis.

The mortgage contract simply states the terms of the payments or repayments.

End of lecture (not sure why I bothered, actually, given it's Friday and I should be raiding the fridge!) :doh:

Thrugelmir

TheGonza wrote: »

the youtube video has nothign do with me not the channel owner or anythingjust ment its has the same mindset as mine, I just posted here out of curiousty to how people would respond to this, so far not much has changed my point of view

if you read my previous posts on money creation, the money was created by the centeral bank therfore was never a loan it was created by the buyers signature the money is received to the seller of the house becuase money is simply ones and zeroes on a computer these days thats how easy money creation is, it was never a loan

Then you'll not mind if your employer is unable to pay you.

fiesta04

Appears the troll (sorry OP) was sent to bed early tonight.

Sweet dreams

F4

magpiecottage

Senior_Paper_Monitor wrote: »

Would that be a bacon roll ?

Apparently it is going to get cooler over the weekend so perhaps pigs in blankets.

But I don't think Miss Piggy is the Muppet here.

WellKnownSid

Thrugelmir wrote: »

Then you'll not mind if your employer is unable to pay you.

McDonalds has plenty of money...

marlasinger

zagfles wrote: »

I'm not going to view it because I know exactly what it'll be saying. The usual rubbish about the fractional reserve banking system creating money out of thin air, by people who don't understand the concept of negative numbers.

I humored the OP and watched the video.

As you say, they talk about the fractional reserve system. However, they don't explain it thoroughly, so I can see how someone with absolutely no knowledge of economics could think this is a new thing. Looks like the clip came about due to an older couple that they interviewed who are grumpy about how much their mortgage is and are worried about their children being in debt in the future.

At the end of the clip, the presenters say that they could have brought in some economists to discuss this, but they would rather not and would prefer the opinion of the viewer. :eek: They said the response was that most people weren't aware of this (fractional reserve banking), which I find very hard to believe.

ILW

TheGonza wrote: »

i am definatley not a troll and secondly this is very real,
Its hard to get my point across when people already have a beleif system in mortgages themselves thats why I keep asking people to view

youtube/watch?v=fOj_xp2jHl0 so I can show people backing up what i've said

Which "British Law" states this is illegal?

zagfles

marlasinger wrote: »

I humored the OP and watched the video.

As you say, they talk about the fractional reserve system. However, they don't explain it thoroughly, so I can see how someone with absolutely no knowledge of economics could think this is a new thing. Looks like the clip came about due to an older couple that they interviewed who are grumpy about how much their mortgage is and are worried about their children being in debt in the future.

At the end of the clip, the presenters say that they could have brought in some economists to discuss this, but they would rather not and would prefer the opinion of the viewer. :eek: They said the response was that most people weren't aware of this (fractional reserve banking), which I find very hard to believe.

:rotfl:What a surprise! Of course most people are aware of it, maybe not the actual term "fractional reserve" but they'll be aware that banks will lend out a large fraction of the amount which savers deposit. It's what banks do, take savings and make loans, anyone who doesn't know that must be from another planet!

What confuses the less numerate members of our society is the fact that the loans can then be redeposited and reloaned several times over, and this appears to create money out of thin air. Obviously it doesn't, it just creates lots of assets and liabilities for the bank and lots of positive and negative balances for the customers.

Gentoo365

If mortgages were unlawful (which they are not) then they would pretty quickly be made lawful as there are many people in the UK that would never be able to pay for a house without getting a loan, and no bank would be willing to lend money without earning interest.

Why am I even bothering posting this I do not know.