Interviewwithabanker about aforeclosure.

Thebanker was placedon

thewitness standandswornin. Theplaintiff's(borrower's) attorney
askedthebanker theroutinequestions concerningthebanker's
educationandbackground.
**
**
*Theattorneyaskedthebanker, "What iscourt exhibit A?"*
*Thebanker respondedbysaying, "This isapromissorynote."*
*Theattorneythenasked, "Is thereanagreement betweenMr. Smith
(borrower) andthedefendant?"*
*Thebanker said, "Yes."*
*Theattorneyasked, "Doyoubelievetheagreement includesalender
andaborrower?"*
*Thebanker respondedbysaying, "Yes, I amthelender andMr.
Smithistheborrower."*
*Theattorneyasked, "What doyoubelievetheagreement is?"*
*Thebanker quicklyresponded, saying, " Wehavetheborrower sign
thenoteandwegivetheborrower acheck."*
*Theattorneyasked, "Does thisagreement showthewords borrower,
lender, loan, interest, credit, or moneywithintheagreement?"*
*Thebanker respondedbysaying, "Sureit does."*
*Theattorneyasked, `"Accordingtoyour knowledge, whowastoloan
what towhomaccordingtothewrittenagreement?"*
*Thebanker respondedbysaying, "Thelenderloanedtheborrower a
$50,000check. Theborrower got themoneyandthehouseandhas
not repaidthemoney."*
*Theattorneynotedthat thebankernever saidthat thebankreceived
thepromissorynoteas aloanfromtheborrower tothebank. He
asked, "Doyoubelieveanordinarypersoncanuseordinaryterms and
understandthiswrittenagreement?"*
*Thebanker said, "Yes."*
*Theattorneyasked, "Doyoubelieveyouor your companylegally
ownthepromissorynoteandhavetheright toenforcepayment from
theborrower?"*
*Thebanker said, "Absolutelyweownit andlegallyhavetheright to
collect themoney."*
*Theattorneyasked, "Does the$50,000notehaveactual cashvalue
of $50,000?Actual cashvaluemeans thepromissorynotecanbesold
for$50,000cashintheordinarycourseof business."*
*Thebanker said, "Yes."*
*Theattorneyasked, "Accordingtoyour understandingof thealleged
agreement, howmuchactual cashvaluemust thebankloantothe
borrower inorder for thebanktolegallyfulfill theagreement and
legallyownthepromissorynote?"*
*Thebanker said, "$50,000."*
*Theattorneyasked, "Accordingtoyour belief, if theborrower signs
thepromissorynoteandthebankrefuses toloantheborrower
$50,000actual cashvalue, wouldthebankor borrower ownthe
promissorynote?"*
*Thebanker said, "Theborrower wouldownit if thebankdidnot loan
themoney. Thebankgavetheborrower acheckandthat is howthe
borrower financedthepurchaseof thehouse."*
*Theattorneyasked, "Doyoubelievethat theborrower agreedto
providethebankwith$50,000of actual cashvaluewhichwasusedto
fundthe$50,000bankloancheckbacktothesameborrower, and
thenagreedtopaythebankback$50,000plus interest?"*
*Thebanker said, "No. If theborrower providedthe$50,000tofund
thecheck, therewasnomoneyloanedbythebanksothebankcould
not chargeinterest onmoneyit never loaned."*
*Theattorneyasked, "If this happened, inyour opinionwouldthe
banklegallyownthepromissorynoteandbeabletoforceMr. Smithto
paythebankinterest andprincipal payments?"*
*Thebanker said, "I amnot alawyer soI cannot answer legal
questions."
*Theattorneyasked, " Is it bankpolicythat whenaborrowerreceives
a$50,000bankloan, thebankreceives$50,000actual cashvalue
fromtheborrower, that this givesvaluetoa$50,000bankloancheck,
andthis checkisreturnedtotheborrower asabankloanwhichthe
borrower must repay?"*
*Thebanker said, "I donot knowthebookkeepingentries." *
*Theattorneysaid, "I amaskingyouif thisisthepolicy."*
*Thebanker responded, "I donot recall."*
*Theattorneyagainasked, "Doyoubelievetheagreement*
*betweenMr. Smithandthebankis that Mr. Smithprovidesthebank
withactual cashvalueof $50,000whichisusedtofunda$50,000
bankloancheckbacktohimself whichheis thenrequiredtorepay
plus interest backtothesamebank?"*
*Thebanker said, "I amnot alawyer."*
*Theattorneysaid, "Didyounot sayearlierthat anordinaryperson
canuseordinaryterms andunderstandthiswrittenagreement?"*
*Thebanker said, "Yes."*
*Theattorneyhandedthebankloanagreement marked"Exhibit B" to
thebanker. Hesaid, "Isthereanythinginthis agreement showingthe
borrower hadknowledgeor showingwheretheborrower gavethe
bankauthorizationor permissionfor thebanktoreceive$50,000
actual cashvaluefromhimandtousethistofundthe$50,000bank
loancheckwhichobligateshimtogivethebankback$50,000plus
interest?"*
*Thebanker said, "No."*
*Thelawyerasked, "If theborrower providedthebankwithactual
cashvalueof $50,000whichthebankusedtofundthe$50,000check
andreturnedthecheckbacktotheallegedborrower as abankloan
check, inyour opinion, didthebankloan$50,000totheborrower?"*
*Thebanker said, "No."*
*Theattorneyasked, "If abankcustomer providesactual cashvalueof
$50,000tothebankandthebankreturns$50,000actual cashvalue
backtothesamecustomer, is this aswapor exchangeof $50,000for
$50,000."*
*Thebanker replied, "Yes."*
*Theattorneyasked, "Didtheagreement call for anexchangeof
$50,000swappedfor$50,000, or didit call for a$50,000loan?"*
*Thebanker said, "A$50,000loan."*
*Theattorneyasked, "Is thebanktofollowtheFederal ReserveBank
policiesandprocedureswhenbanksgrant loans."*
*Thebanker said, "Yes."*
*Theattorneyasked, "What arethestandardbankbookkeeping
entriesforgrantingloansaccordingtotheFederal ReserveBank
policiesandprocedures?" Theattorneyhandedthebanker FED
publicationModernMoneyMechanics, marked"Exhibit C".*
*Thebanker said, "Thepromissorynoteisrecordedas abankasset
andanewmatchingdeposit (liability) is created. Thenweissuea
checkfromthenewdeposit backtotheborrower."*
*Theattorneyasked, "Is thisnot aswaporexchangeof $50,000for
$50,000?"*
*Thebanker said, "This is thestandardwaytodoit."*
*Theattorneysaid, "Answer thequestion. Isit aswapor exchangeof
$50,000actual cashvaluefor $50,000actual cashvalue?If thenote
fundedthecheck, must theynot bothhaveequal value?"*
*Thebanker thenpleadedtheFifthAmendment.*
*Theattorneyasked, "If thebank's deposits(liabilities) increase, do
thebank's assetsincreasebyanasset that hasactual cashvalue?"*
*Thebanker said, "Yes."*
*Theattorneyasked, "Is thereanyexception?"*
*Thebanker said, "Not that I knowof."*
*Theattorneyasked, "If thebankrecordsanewdeposit andrecords
anasset onthebank'sbookshavingactual cashvalue, wouldtheactual
cashvaluealwayscomefromacustomer of thebankoraninvestor or
alendertothebank?"*
*Thebanker thought for amoment andsaid, "Yes."*
*Theattorneyasked, "Is it thebankpolicytorecordthepromissory
noteasabankasset offset byanewliability?"*
*Thebanker said, "Yes."*
*Theattorneysaid, "Doesthepromissorynotehaveactual cashvalue
equal totheamount of thebankloancheck?"*
*Thebanker said"Yes."*
*Theattorneyasked, "Does thisbookkeepingentryprovethat the
borrower providedactual cashvaluetofundthebankloancheck?"*
*Thebanker said, "Yes, thebankpresident toldus todoit thisway." *
*Theattorneyasked, "Howmuchactual cashvaluedidthebankloan
toobtainthepromissorynote?"*
*Thebanker said, "Nothing."*
*Theattorneyasked, "Howmuchactual cashvaluedidthebank
receivefromtheborrower?"*
*Thebanker said, "$50,000."*
*Theattorneysaid, "Isit trueyoureceived$50,000actual cashvalue
fromtheborrower, plusmonthlypayments andthenyouforeclosed
andneverinvestedonecent of legal tender orotherdepositors' money
toobtainthepromissorynoteinthefirst place?Is it truethat the
borrower financedthewholetransaction?"*
*Thebanker said, "Yes."*
*Theattorneyasked, "Areyoutellingmetheborrower agreedtogive
thebank$50,000actual cashvaluefor freeandthat thebanker
returnedtheactual cashvaluebacktothesamepersonas abank
loan?"*
*Thebanker said, "I wasnot therewhentheborrower agreedtothe
loan."*
*Theattorneyasked, "DothestandardFEDpublicationsshowthe
bankreceives actual cashvaluefromtheborrower for freeandthat the
bankreturnsit backtotheborrower asabankloan?"*
*Thebanker said, "Yes."*
*Theattorneysaid, "Doyoubelievethebankdoesthis without the
borrower's knowledgeor writtenpermissionor authorization?" *
*Thebanker said, "No."*
*Theattorneyasked, "Tothebest of yourknowledge, istherewritten
permissionor authorizationforthebanktotransfer $50,000of actual
cashvaluefromtheborrowertothebankandfor thebanktokeepit
forfree?*
*Thebanker said, "No."*
*Doesthisallowthebanktousethis$50,000actual cashvalueto
fundthe$50,000bankloancheckbacktothesameborrower, forcing
theborrower topaythebank$50,000plus interest?"*
*Thebanker said, "Yes."*
*Theattorneysaid, "If thebanktransferred$50,000actual cashvalue
fromtheborrower tothebank, inthispart of thetransaction, didthe
bankloananythingof valuetotheborrower?"*
*Thebanker said, "No." Heknewthat onemust first deposit
somethinghavingactual cashvalue(cash, check, or promissorynote)
tofundacheck.*
*Theattorneyasked, "Is it thebankpolicytofirst transfer theactual
cashvaluefromtheallegedborrower tothelender for theamount of
theallegedloan?"*
*Thebanker said, "Yes."*
*Theattorneyasked, "Does thebankpayIRStaxontheactual cash
valuetransferredfromtheallegedborrower tothebank?"*
*Thebanker answered, "No, becausetheactual cashvaluetransferred
shows uplikealoanfromtheborrower tothebank, or adeposit which
is thesamething, soit is not taxable."*
*Theattorneyasked, "If aloanis forgiven, isit taxable?"*
*Thebanker agreedbysaying, "Yes."*
*Theattorneyasked, "Is it thebankpolicytonot returntheactual
cashvaluethat theyreceivedfromtheallegedborrower unless it is
returnedasaloanfromthebanktotheallegedborrower?"*
*"Yes", thebankerreplied. *
*Theattorneysaid, "Younever paytaxes ontheactual cashvalueyou
receivefromtheallegedborrower andkeepas thebank's property?"*
*"No. Notaxispaid.", saidthecryingbanker.*
*Theattorneyasked, "Whenthelenderreceives theactual cashvalue
fromtheallegedborrower, does thebankclaimthat it thenowns it
andthat it isthepropertyof thelender, without thebankloaningor
riskingonecent of legal tenderor other depositors' money?"*
*Thebanker said, "Yes."*
*Theattorneyasked, "Areyoutellingmethebankpolicyisthat the
bankownsthepromissorynote(actual cashvalue) without loaning
onecent of otherdepositors' moneyor legal tender, that thealleged
borrower istheonewhoprovidedthefundsdepositedtofundthe
bankloancheck, andthat thebankgetsfundsfromthealleged
borrower for free?Is themoneythenreturnedbacktothesameperson
asaloanwhichtheallegedborrower repayswhenthebanknevergave
upanymoneytoobtainthepromissorynote?AmI hearingthisright?
I giveyoutheequivalent of $50,000, youreturnthefundsbacktome,
andI havetorepayyou$50,000plusinterest?DoyouthinkI am
stupid?"*
*Inashakingvoicethebanker cried, saying, "All thebanks aredoing
this. Congress allows this."*
* Theattorneyquicklyresponded, "DoesCongressallowthe
bankstobreachwrittenagreem ents , usefalseandmisleading
advertising, act without writtenpermission, authorization, and
without theallegedborrower's knowledgetotransfer actual cashvalue
fromtheallegedborrower tothebankandthenreturnit backas a
loan?"*
*Thebanker said, "But theborrower got acheckandthehouse."*
*Theattorneysaid, "Isit truethat theactual cashvaluethat wasused
tofundthebankloancheckcamedirectlyfromtheborrower andthat
thebankreceivedthefundsfromtheallegedborrowerfor free?"*
*"It is true", saidthebanker.*
*Theattorneyasked, "Is it thebank's policytotransferactual cash
valuefromtheallegedborrower tothebankandthentokeepthe
fundsasthebank'sproperty, whichtheyloanout as bankloans?"*
*Thebanker, showingtearsof regret that hehadbeencaught,
confessed,
"Yes."*
*Theattorneyasked, "W asit thebank's intent toreceiveactual cash
valuefromtheborrower andreturnthevalueof thefundsbacktothe
borrower as aloan?"*
*Thebanker said, "Yes." Heknewhehadtosayyesbecauseof the
bankpolicy.*
*Theattorneyasked, "Doyoubelievethat it wastheborrower'sintent
tofundhisownbankloancheck?"*
*Thebanker answered, "I was not thereat thetimeandI cannot know
that went throughtheborrower's mind."*
*Theattorneyasked, "If alender loanedaborrower $10,000andthe
borrower refusedtorepaythemoney, doyoubelievethelenderis
damaged?"*
*Thebanker thought. If hesaidno, it wouldimplythat theborrower
doesnot havetorepay. If hesaidyes, it wouldimplythat theborrower
is damagedfortheloantothebankof whichthebankneverrepaid.
Thebanker answered, "If aloanisnot repaid, thelenderisdamaged."*
*Theattorneyasked, "Is it thebankpolicytotakeactual cashvalue
fromtheborrower, useit tofundthebankloancheck, andnever
returntheactual cashvaluetotheborrower?"*
*Thebanker said, "Thebankreturnsthefunds."*
*Theattorneyasked, "W astheactual cashvaluethebankreceived
fromtheallegedborrower returnedasareturnof themoneythebank
tookor was it returnedasabankloantotheborrower?"*
*Thebanker said, "Asaloan."*
*Theattorneyasked, "Howdidthebankget theborrower's moneyfor
free?"*
*Thebanker said, "That is howit works."*