In Scrambled
Notes here on 10/16 I noted that thanks to NY Supreme Court
Judge Arthur Schack, it might actually be feasible for almost
anyone with a mortgage to walk away from it, and get a free
house. I wrote that that would destroy the lending industry and
effectively move cash from one's future to one's present, though
I added that wasn't necessarily a bad thing since in the future,
fiat money will be worthless. Since then Gonzalo Lira has added another
article (with even worse foul language) to amplify how to begin
that process if one wants to (the clients whose
case he described did not) and there the matter sits. The media
seem to me to be holding its breath. This could be the biggest
domestic news of the last century, yet everyone is avoiding it -
no doubt for fear of being accused of pulling out the card that
causes the nation's financial house to fall in a heap. I'm still undecided about the ethics of not paying (as
were Lira's clients) - that is, if one is under no particular stress,
is it right to stop paying off a loan merely because the creditor
cannot enforce it? - and some have observed that the absence of a
proper Note doesn't eliminate the obligation, it just turns it
into an unsecured loan, which might be dischargeable in
bankruptcy. I don't know about such fine points, but am just
interested in whether promises ought to be kept, when possible.
Two factors may bear upon the question. 1. When a mortgage is written, the lender is committing huge
fraud. Yes, the fraud is legalized (government declares that down
is up) and yes, it brings about the desired result of
transferring the house key from seller to buyer; but it's fraud
anyway. First, the money being loaned is not money at all. It is
described as "two hundred thousand dollars" but in fact
is no such thing; for a "dollar" by definition
is 24.057 grams of pure silver, and there were not 4.811 tons of silver
on the table at the closing. Second, the lender didn't have those
funds anyway, but by rules approved by government, called fractional
reserve, he was lending as much as ten times what had
been deposited with him for safe keeping; so he loaned
something that wasn't money, and mostly wasn't his. Such fraud
invalidates the loan. 2. Law (including whatever law may settle the question of
whether missing Notes invalidate mortgage loans) is what
government judges say it is, plain and simple. It is not what is
written by representatives of The People; all of that is complete
whitewash and
was
always intended to be. Arthur Schack has said it one way, but
pretty darn soon if this matter threatens the money tower
government has built, its other and superior judges will rule the
contrary. In fact, I'd not be amazed if the word has already been
issued, from a certain egg-shaped office, that such is the way it's
going to be; for just 10 days after the Bank of America suspended
foreclosures while Judge Schack was saying his piece, it reversed itself. So if I'm right and it's government policy, in future judges will
obediently declare that 55 million clearly worded contracts do not
mean what they plainly say. In the coming zero government society, contracts will be
enforced on the basis of what they are and say; for any different
judgment would expose the court as partial and therefore not
worthy of trust as a competing player in the justice market.
Today courts are viciously partial, but they have no competitors.
They are merely the hatchet-men for government.
10A053
Loan Law
by Jim Davies, 10/25/2010
