One of the most important fraudulent elements in a mortgage transaction is the check / cheque that you write to the vendor / seller of the property. Few appreciate what it is, or its function in the larger process.
To make it simple, assume that your neighbour has a $1 million house and property for sale and that they have clear-title to it. You decide that you want to buy it and you go to a bank for a nominal mortgage loan.
But you are also a little more savvy than most, and you know that when the transactional-dust settles, all that the vendor / seller will have is an account at the bank under which the bank / banker agrees that they owe them $1 million. So you say to the banker: “What is it that you need from me in order for the bank to agree that it owes $1 million to the vendor / seller of the house?”
If truthful, the banker will reply to the effect:
- I need you to sign and deliver to the bank a nominal $1 million promissory note under which you agree that you owe the bank $1 million now, and that you will pay the bank interest at the rate stated on that amount that you owe now until the named Maturity Date, and that you will then pay the bank another / different $1 million on the Maturity Date;
- I need you to sign and swear under oath and penalty of perjury, and then register or deliver to the bank, a mortgage declaring and acknowledging that the bank has already paid you $1 million, and that you are unconditionally and irrevocably transferring all right, title and interest in the house and property to the bank; and
- I need you to sign and deliver a check / cheque for $1 million, drawn on the bank and made payable to the seller / vendor, and which the seller / vendor must then endorse and deliver to the bank.
Then the bank will agree that the bank owes the vendor $1 million.
Did you catch all of the financial sleight-of-hand involved in the transaction?
The banker arrives at the transaction with nothing at all, and does not contribute anything that he does not obtain from the other two nominal parties, and then leaves with $5 million in cash-equivalent money-assets including the clear-title to the $1 million property, in exchange for his bare agreement that he owes the vendor / seller $1 million, and by issuing a costless constructive repurchase-option to you to buy the property back from the bank by paying it all the named-principal and interest under the promissory note and doing everything else required of you under the mortgage, including the ongoing payment of the property-taxes and fire-insurance-etc premiums on the bank’s property until you fully and finally redeem or exercise the repurchase option.
Regardless of the scandalously criminal substance of the rest of it, people generally completely miss the fact and significance of the check / cheque. To the bank, the signed check drawn on the bank is a $1 million cash-equivalent money-asset even though it is drawn on the bank itself.
Assume for example, and again to make it easy (a little contrived but it demonstrates the point), that you didn’t need the mortgage and instead you were to deposit $1 million in cash at the bank and told the banker to hold on to it because you are planning to come back and withdraw it the next day to pay for the house in cash.
But then you change your mind and write a check to the vendor instead. Upon endorsement and delivery of the check to the bank the bank would then completely own the $1 million in cash and the vendor / seller would simply have an account evidencing the bank’s bare agreement that it owes them $1 million. In effect the bank would substitute the endorsed check to claim the $1 million in cash for itself. Either way the check is worth $1 million to the bank, yet we have all been conditioned not to take it into account along with its unjust enrichment of the bank.
But the same check and its endorsement and delivery by the vendor also severs the bank’s liability to the vendor for the fraudulent transaction.
Assume that the bank were to go bankrupt the next day. The vendor would scream the proverbial bloody murder because they will have exchanged their clear title to the $1 million property for an unsecured deposit account from the bank, and the bank’s (and the solicitor’s) fraud would be exposed at that point. But the vendor has no recourse because by endorsing the check from the buyer, and delivering it to the bank, they effectively ratify the fraudulent transaction. Otherwise the bank would have to carry the potential liability to the vendor on its accounting books and that would interfere with the ongoing smooth operation of the pyramid/ponzi scheme.
One million of the bank’s total $5 million gain is provided by the vendor being duped into exchanging their clear title for an unsecured liability.
In fact, under R. v. Olan (1978), which is still the leading case on fraud in Canada, the Supreme Court of Canada explained that the core banking function in Canada is fraud by definition. In Olan, the directors of a company had exchanged what the Court described as Blue Chip securities belonging to the company, for an unsecured promissory note from a third party. The Court ruled that the fraud was complete as and when the transaction was done, and did not depend on any subsequent default under the unsecured promissory note. But that is exactly the same process under virtually every mortgage transaction by a chartered bank or any other pretended lender or creditor.
Assume that your neighbour was the sole owner (shareholder) and director of a company that was the technical clear-title owner of the property. On the day of the transaction that sole director would give away their company’s clear-title in exchange for an unsecured deposit credit or promise to pay from the bank. Under Olan, and in fact, that is a fraud, and which does in fact result in the commensurate unjust and unearned enrichment of the bank.
We have all been conditioned and habituated to perceive the prima facie criminal transfer of wealth to banks as normalized.
On the day of the Sun Life transaction in 1997 that we use as a process example on the website, Sun Life became instantaneously $10 million richer after having purportedly made a loan by parting-with $2.1 million of its own pre-existing money to an alleged borrower.
Every day on this planet, the world’s privately-owned nominal-banking system likewise obtains the USD-equivalent of about $60 billion ($60,000,000,000) of combined real assets and unconditional-financial assets in exchange for its collective bare and unsecured agreement that it owes $30 billion in return. And it has been going on in that manner for over a century.
So how does the wealth of the world get gratuitously transferred to the private banks day-after-day, year-after-year, and decade-after-decade, while those same banks and their owners claim to be in a perpetual state of teetering on the edge of bankruptcy to the point of requiring trillions of more dollars as a gift from government and nominal tax-payers or else the system will collapse?
Seriously, what gives?
Is it possible that we are all being victimized and pauperized by a financial crime and psy-op that is so enormous as to defy human comprehension?