Wednesday, April 12, 2006
Hi! And Welcome to my blog. As the title would suggest, we are in a game. A very real and seriuos game. This game has been going on for hundreds of years and forms the bases of current global financial and political realities. However, you have a choice about which part you play in the game. Assuming you comprehend the difference between the parts being played.

The intent of this Blog is to provide enlightening information. Some original and some borrowed shamelessly, with the intent to distribute it to a more wider audience. Our expressed interest is in the information, not the personalities involved in producing or are directly related or associated with the information. However, we will provide source links when available.

If you are one of the few who have taken the red pill (anology to the popular film called the “Matrix”) then you will find these topics interesting and enlightening. For the timid, weak, and unwilling to break free of the lackluster education (brainwashing) you recieved that forms the bases of your ignorance, I suggest you take the blue pill and stop reading now.


Earlier we discussed how banks and other pirates steal whole economies. here we will discuss how that process works every day in America. Unfortunately, many Americans have no idea that it is their participation in this game that is set-up for them to loose before they even start playing. Lets begin by understanding why a bank wants you to sign a promissory note and how the bank “originates” new money.

The term “origination” is just another word for counterfeiting. To “originate” is to “counterfeit.” If a bank accepts your promissory note for $100,000, it will be authorized by the Federal Reserve Bank to originate or counterfeit the face value of this note and add it to the currency supply of the economy. This is the only cause of inflation and higher taxes. Once the bank originates the new currency, it is authorized by the Federal Reserve to originate this amount nine more times. You should be primarily concerned with one ultimate fact, that in the origination process the bank customer becomes the lender to the bank as evidenced by the account general ledger. In other words, just like the bank customer is the lender when he opens a checking account and deposits $100, every bank customer today who is “extended credit” by a bank, is in reality, the lender and the bank is the borrower. The amount lent by the bank customer is the value of the promissory note or the credit limit.

By originating currency (not money), the banks are able to steal from consumers. If you were to pay for something that didn’t cost the seller anything, that is stealing. It is getting something for nothing. They, the bank(s) are getting your labor and valuables for nothing. You are paying the bank to counterfeit currency, and in doing so, not only do you pay for it with the single contract (note) that creates (originates) the new currency, but your children pay for it in higher taxes and inflation. It is a simple concept to understand that you give a promissory note to a bank and they send what amounts to currency to the seller of the property you are buying. The bank then files a lien against the property so that you either pay for it three times over, or they take the property. It becomes a little more complex when we begin to discover that there are other players in the game besides you, the bank and the seller.

In order to further obfuscate the fact that the banks are stealing from you by counterfeiting, they employ third party companies whose sole function is to create the new currency (do the dirty work) for the commercial banks that solicit you for business. Just like in any industry, there are manufacturers and there are wholesalers and there are retailers. The commercial banks and mortgage brokers are the retailers. The manufacturers and wholesalers of the currency in the banking industry are the correspondents and warehouse lenders. I had the same question you might now have, how do you originate currency when you do not have a customer’s promissory note? You create an accounting ledger and make an entry showing that new currency is now part of the ledger. But it’s better than that, the process is completed by computer software. This allows only the bank officers and owners to know what they are doing and the rest of the employees can believe what they are told.

A bank is nothing more than a database with the exclusive right to communicate with other banks in a system using routing numbers and other types of telephone communication schemes. Today, a bank is not really a place where you keep tangible valuables (it can be though); it is merely a database, a place to keep a record of assets and liabilities. Essentially, a bank is an accounting ledger. If you had a routing number and a telephone, you might be able to create your own ledger in a computerized database and wire the newly created currency into an account at another bank. Of course this would be illegal unless you had a banking license. Only banks can counterfeit new currency today. The origination process begins with the customer’s promissory note, very much like credit card applications. The note is the cash that allows the banks to steal from consumers and can be the key element in exposing the fraud.


The original note must be produced as evidence in support of a mortgage foreclosure action or to foreclose on any secured debt where a note was used in its origination. It is so important that the bank cannot win its case unless it either produces the original note, tricks the court into creating a new one, or tricks the defendant into certifying that a copy of the note is a true and correct copy of the original.

The note in a mortgage agreement is “securitized” by a third party for investors in the mortgage backed securities market. The Securities and Exchange Commission (SEC) requires the bank to create a new entity (corporation or trust) to become the new third party custodian of the original note. When a bank forecloses, they claim the note has been lost, stolen, destroyed or mutilated and ask the court to reestablish it. The truth is that they cannot recover the note from the security pool after it’s transferred to the third party custodian since that would defraud the investors and create an SEC violation.

Instead, they defraud the court and the defendant and obtain the court’s permission to create a new note (asset). Only the original endorsed note is the note and only that can prove the right to foreclosure.

If you find yourself involved in a foreclosure it is very important that you make this clear to the court since you can have your best chance of winning without relying solely upon actually proving the fraud. Here is what the courts have had to say about it:

Where the complaining party can not prove the existence of the note, then there is no note. To recover on a promissory note, the plaintiff must prove (1) the existence of the note in question; (2) that the party sued signed the note; (3) that the plaintiff is the owner or holder of the note; and (4) that a certain balance is due and owing on the note. See In Re: SMS Financial LLC v. Abco Homes, Inc. No.98-50117 February 18, 1999 (5th Circuit Court of Appeals.) Volume 29 of the New Jersey Practice Series, Chapter 10 Section 123, page 566, emphatically states, “…; and no part payments should be made on the bond or note unless the person to whom payment is made is able to produce the bond or note unless the person to whom payment is made is able to produce the bond or note and the part payments are endorsed thereon. It would seem that the mortgagor would normally have a Common law right to demand production or surrender of the bond or note and mortgage, as the case may be. See Restatement, Contracts S 170(3), (4) (1932); C.J.S. Mortgages S 469 in Carnegie Bank v. Shalleck 256 N.J. Super 23 (App. Div 1992), the Appellate Division held, “When the underlying mortgage is evidenced by an instrument meeting the criteria for negotiability set forth in N.J.S. 12A:3-104, the holder of the instrument shall be afforded all the rights and protections provided a holder in due course pursuant to N.J.S. 12A:3-302” Since no one is able to produce the “instrument” there is no competent evidence before the Court that any party is the holder of the alleged note or the true holder in due course. New Jersey common law dictates that the plaintiff prove the existence of the alleged note in question, prove that the plaintiff sued signed the alleged note, prove that the plaintiff is the owner and holder of the alleged note, and prove that certain balance is due and owing on any alleged note. Federal Circuit Courts have ruled that the only way to prove the perfection of any security is by actual possession of the security. See Matter of Staff Mortg. & Inv. Corp., 550 F.2d 1228 (9th Cir 1977), “Under the Uniform Commercial Code, the only notice sufficient to inform all interested parties that a security interest in instruments has been perfected is actual possession by the secured party, his agent or bailee.” Bankruptcy Courts have followed the Uniform Commercial Code. In Re Investors & Lenders, Ltd. 165 B.R. 389 (Bkrtcy.D.N.J. 1944), “Under the New Jersey Uniform Commercial Code (NJUCC), promissory note is “instrument,” security interest in which must be perfected by possession …” Unequivocally the Court’s rule is that in order to prove the “instrument”, possession is mandatory.

New loan accounts begin with the customer signing a promise to pay (promissory note) and approval of his credit worthiness by the “lender.” This is known as the “loan origination” process and it continues with the “lender” usually giving the maker of the note, the customer, a check for the value of the note, or a line of “credit.” The terms “lender” and “credit” are used loosely because the so called creditors discussed here are not lenders because they lend nothing, and are not creditors for the same reason.


The customer of the bank (what is called the lender) or broker (e.g. mortgage broker) signs and agrees to the terms and conditions of a promissory note. The terms are disclosed on paper, a note, which is signed by the customer. At this point, the note has no value. Without the customer’s knowledge or consent, the eventual “lender” accepting the note affixes an indorsement to the original paper document (note) that was signed by the customer. The indorsement makes the note a negotiable instrument now payable to the “lender.” It also means that the customer’s signature on the note has been illegally altered, or forged. Yes, every mortgage involves forgery.

Let’s discuss the issue of “endorsement” or “indorsement”, same meaning, the note becomes payable to the lender after the lender affixes the indorsement. Black’s Law Dictionary defines the term “indorsement”:

An indorsement is the act of a payee, drawee, accommodation indorser, or holder of a bill, note, check, or other negotiable instrument, in writing his name upon the back of the same, with or without further or qualifying words, whereby the property in the same is assigned and transferred to another, U.C.C. § 3-302. An indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof. In other words, the indorsement must be authorized first by the maker, then by any subsequent indorsees. An unauthorized indorsement is one made without actual implied or apparent authority and includes a forgery. U.C.C. § 3-304.

The record of endorsement is known as an “allonge.” Here is an example of an actual allonge, affixed to the note by a separate piece of paper with a form stamp:


Loan Number: __________________________________

Borrower Name(s): _______________________________

Property Address: ________________________________

Note Date:

Loan Amount: $



ON THIS _____ DAY OF ____________________________



BY: [Signature of Vice President]

[Name of Vice President]

The signature of the holder in due course would sign this allonge, naming the new indorsee on the PAY TO THE ORDER OF line. It could be from one bank to another, but it is never from the maker of the note, the bank customer, to the bank. We have can reviewed every state’s appellate court case in the USA (24) involving an allonge.

In order for the allonge to be legally binding and in order for it to make the lender or bank the true and legal “holder in due course” (the owner), the note must be indorsed first by the maker. The maker of the note must knowingly indorse it so that it becomes payable to the payee or indorsee, that is, the “alledged lender” or bank. The maker of the note, which is always the bank customer, never has knowledge of this, yet the bank or “alledged lender” affixes the indorsement as if it were legally authorized by the maker. This creates new money that has never existed before, making the bank customer the lender and the bank or “alledged lender” the true borrower! we don’t make this claim because we dislike the banking system, we are able to make this claim because the truth of it is revealed in the bank’s very own accounting records. In addition to creating new money and establishing the maker as the lender, the forged indorsement allows the bank to steal or take the customer’s money for free, without his knowledge. It may be difficult to see a piece of paper such as a promissory note as cash or the cash of the signer or maker, but the note really is as good as cash equal to its face value. Our problem in understanding this is that we do not typically engage ourselves in this type of business and most of us do not have a degree in law, business, economics or accounting. Even if we did, the technical aspects discussed here are not generally published in this manner, for reasons which we hope are now obvious to you.

As you may be aware by now, notes and mortgages are sold, assigned and transferred many times before they are satisfied. Each time, a new allonge (record of indorsement) must be affixed to the note so that the previous indorsements are shown. In other words, a clear chain of title must be shown in the records containing the note and all indorsements, beginning from the very document signed by the maker. Each new indorsee becomes the holder of the note, or legally, “the holder in due course,” meaning the legal owner of the note or receivable (mortgage). If the current holder does not have possession of the original note and all records of each valid indorsement, no ownership or collection rights can be established or enforced and the purported holder is nothing more than a transferee, having no rights to maintain any claim against the bank customer (maker of the note).

Aside from the true facts establishing that the “alledged lender” is not truly the lender but in fact the borrower, most banks or note holders do not possess the original note or any records of any valid indorsement. If they did, it could be used against them to prove fraud and forgery among many other legal violations. This fact alone is usually enough to force the bank (or the court) to cancel the note or agree to it being rescinded and waiving all claims against the maker of the note, that is, the customer.

During discovery, the attorney for the bank may attempt to get the bank customer, to admit that the bank’s copy of the original note is true and correct. Because most people would be inclined to make that admission, they will lose the case and all defenses unless fraud can be proven. You must understand that without the original blue-ink signature on the original note, no copy can be considered legally binding, not even if the signature on the copy appears to be the signature of the maker of the original note and not even if it shows a stamp of endorsement by the bank, it must be the original.

Most people are not handwriting experts and cannot provide testimony or any admission that such a copy of his signature is truly his signature. It is not a reasonable conclusion to make, and unless the bank can produce the original note and all records of valid indorsements, we should not assist them to undertake the impossibility of proving their case against the maker or bank customer. A simple response to this type of question is “I cannot be certain that what you are showing me is my signature.”

The banks do nothing about lost notes unless there are grounds to foreclose. At that time, a count in the foreclosure complaint is added to request the court to order the note to be reestablished.

Because most attorneys will not challenge the banks on these issues for their clients and because most people, even the bank employees and their attorneys are totally unaware of these facts, the real and important issues of the banking scheme are never revealed to the public or challenged. A typical attorney will advise you to deed over your house to the foreclosing bank since most will not allow you to cure any purported default. Remember, that the object of banking is to create a situation in which the bank customer believes he is the borrower and can never repay what he believed he borrowed. Reestablishing the “lost” note is a useful tool in assisting the banks to conceal the records that could be used to expose them. Requests to reestablish lost notes on the basis that the note is lost, destroyed or mutilated are usually granted. The bank relies upon a state statute for this purpose, but the statutes researched never apply to notes since they are never recorded on any public record.

Mortgages are recorded on the public record. Most statutes permit “All papers, written or printed, or any kind whatsoever, and the records and files of any official court or public office, may be reestablished…” It is questionable as to whether or not this language applies to notes which are not recorded but I believe the argument can be made to oppose the bank’s petition, especially when the bond requirements established by the Government National Mortgage Association have not been met. A bond is required to be filed for all lost notes but no such records have ever been located or identified. Furthermore, if it can be proven that the holder is in the business of mortgage backed securities (most are), it can probably be proven that the note could not have been lost, stolen, destroyed or mutilated, or the SEC would be very interested.


Evidently, it is not enough for the banks to fraudulently obtain your money for free, making you believe that they are lending you something. And then to complete the process, alter your signature that appears on the promissory note and commit forgery. No, this is only the beginning. In order for the banks to remain competitive, they must use your promissory note as an asset through which they can solicit investor capital and pay and receive dividends.

The Securities and Exchange Commission has an established set of rules and procedures that holders of promissory notes can follow for the purpose of converting a promissory note, a bank receivable which they claim to be their own asset, into a security that can be sold publicly to investors. This is known as the “securitization” process and the simple explanation of it is that the holder transfers ownership of a class of notes into a pool owned by a third party corporation or trust. Think of it like a black box, so that when the process is complete, your note is then part of a pool of other notes that is actually sold as shares to investors, just like stock certificates are sold to stock holders. The most important understanding about this process is that the ownership of the note, the rights of the holder, pass to a third party who is not in the business of mortgage banking necessarily.

Because the ownership of the note passes to a third party holder, the original bank or assignee bank or servicing agent that you are making mortgage payments to is no longer the holder, or “holder in due course”. The only way any foreclosure or trustee sale can be valid is if the rights are foreclosed upon by the legitimate holder of the note. The bank cannot retrieve the note from the pool, since that would devalue the stock and because of the process required, would also be prohibited under SEC rules. It would be securities fraud for the bank to foreclose and retrieve the original note from the pool to prove to the court that it is the holder.

Mortgage backed securities constitute thirty percent of the annuity market, while the remaining seventy percent comes from corporate bonds. That means anyone investing in long-term annuities or even mutual funds are benefiting from this fraud. Everyone has a hand in it, and many are not even aware that it circulates throughout the economy like a virus. The fraud is so well institutionalized that when people are informed by this message, they cannot believe it. Some people just do not comprehend it and push it out of their minds as you would any boring political discussion. The evidence is overwhelming, ask the SEC to explain about mortgage backed securities, and better still, ask your bank.

The banker’s attorney’s would rather perpetrate the fraud upon the court than investigate the defendant’s claims that the note was forged and used to originate the money for the purchase and that his client is no longer the holder of the note because of the securitization process. Attorneys participate in the fraud by writing a second complaint in a foreclosure action, a count to “reestablish the note” alleging that it was lost, stolen, mutilated or inadvertently destroyed.

Think about this for a minute, many of these banks are in fact among the largest organizations and businesses in the world. They rely on thousands of attorneys, CPAs, consultants and other professionals, maintain a long list of licenses and charters, and yet they are able to lose a piece of paper valued averaging anywhere from $100,000 to $500,000? Who is accountable? In fact, if it were stolen, who would really have the motive to steal a promissory note? It has no value to the bearer, unless the bearer is another bank who would then have to claim right of assignment. I don’t think so. Oh, but it was destroyed? Inadvertently? Oh, I see, it must be because the custodian took the note with him on that company picnic last year and it got wet in the rain. Yeah right. This is the biggest fraud in history and no law can cover it up. The trouble is that it has been permitted for so many years, the attorneys and many judges actually believe this garbage, look the other way, or just simply cannot understand that the bank is lying or stealing.


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