-3 votes

You loan it, you own it law

The title of the law pretty much says it all

Because basic contracts are a fundamental part of libertarian beliefs, how is it that you can make a contract with a bank, and then they sell it to someone else? I assume it's all buried in a lengthy contract somewhere that they can do that, but it shouldn't be legal UNLESS it is on a separate form that is signed within 30 days of the sale of the loan. And for one thing, that will entice the banks to offer a benefit to the customer to sell it at the very least.

But seriously, doesn't this one law solve just about EVERYTHING????

I say this because I think OWS needs a mission statement.

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Private "notes" have been bought and sold for a long time.

Here's the thing: in the past, it has been traditional, in most states, to record the loan at the county recorder's office. Since the formation of MERS, this was not necessarily the case. MERS held the note and it wasn't recorded.

The effects of that are well-known to you. In addition, thousands of states lost billions of dollars as the notes were never recorded at county recorder offices and recordation fees were never charged or collected.

I don't know about other states, but here in Caliornia, a note can be legal, but still not recorded. This makes it "interesting". What that means is if you find out you do not have clear title, due to the loan not being recorded, title insurance does not cover it, and you are SOL.

Today, it is still a practice, when someone buys a property, the owner may "take back paper", say at 8% interest for 15 years or whatever. That accomplishes the sale of the property potentially on a tax-favored installment sale basis (or not depending on the terms). So now the owner of the note decides...hey "I don't want to wait 15 years to collect" so I am going to "sell the note" at a discount and get my money now. So maybe the future value of the note is $180,000---the owner sells the note now for $100,000 cash up front. This practice has been around in the private sector for years and years. It facilitates the sale of property and the buying of property. There are people called "note brokers" and all they do is buy and sell "paper" all day long. These are honest regular people who did not commit any crime.

Here's another example: you want to buy a house. You are self-employed. It is hard for you to document income. Even if you have lots and lots of rental income, sometimes banks flat out don't count that as income. Some banks only consider wages as income. So in this case the bank says they will give you $100,000 and you need $110,000. The property owner then can "take back the note" and this allows them to sell the property and you to buy it. But the note owner goes into the note market and sells the note. It is the free flow of capital. But the problem is these banks are not private individuals, and they set up this troublesome MERS thing.

I don't have the answer, but these are some relevant issues.


I think notes should be able

I think notes should be able to be sold BUT that the company who wants to sell has to go to the other party and have them sign a separate document that allows it to be sold, at which point they'll say "what's in it for me?" And if they don't do that, the contract is automatically null and void.

It also has an important affect. Aside from there being no fool's gold loans to buy, the banks will take FAR greater care in the loans they make and will be unable to become loan factories, putting the consequences on others if they go badly.

"Timid men prefer the calm of despotism to the tempestuous sea of liberty." - Thomas Jefferson
"Annoyance is step one of thinking"
"We're all in the same boat, it doesn't matter if you like me"

Actually a lot of the problems would be solved if the loans

were just recorded as was the original intention of the law. The banks came up with this MERS thing and cut everyone else out. Before MERS came around everything was fine. MERS is the source of the problem....(of course in addition to basic crooks and liars!)


Could be. Need to look into

Could be. Need to look into it more, but still I think "You loan it, you own it" is more understandable to the public at large. They don't understand the intricacies of this and I only know a little bit of it.

"Timid men prefer the calm of despotism to the tempestuous sea of liberty." - Thomas Jefferson
"Annoyance is step one of thinking"
"We're all in the same boat, it doesn't matter if you like me"


OWS developed a "mission statement" in their "list of demands". Those kept us in hysterics for weeks. Since then the national GA process tried and failed to develop anything cogent. The GA process has now broken. OWS as a national movement has ceased to exist. However, only be breaking down into smaller, more focussed units will their consensus process be able to articulate a workable mission statement.

Why you would want to bother imposing one on them from the outside is beyond me unless you simply like frustration. However "loan it and you own it" is not a position that respects contract. The libertarian position is to honour your loan, to pay your debts, to uphold your word. "Who holds the note" is sufficient to put the parties to this contract in dispute but not much more. The only reason this isn't getting processed by courts is the financial companies are all holding these notes (redundantly) and artificially inflating their balance sheets otherwise it would be bailout time AGAIN.

It avoids the whole moral equivalency argument (and it's more intellectually honest) to simply call it the "they screwed you so screw them back" initiative since OWS is far, far away from being able to draft and find sponsors for any form of legislation. Like seriously.

The one take-away from OWS is the hardened socialist/communist blocs as well as the big unions tried their very, very best to co-opt and control OWS to no avail. These kids might not be educated in our terms but they are smart enough to avoid yet another control structure.

Most of those who think so actually don't and most of those who think sew actually rip.

Not imposing, just a

Not imposing, just a suggestion. It's a simple law that would solve the problem they seek to solve.

No more selling a thousand loans in a block to others as if those loans have any value outside of "in theory".

Aside from this, how is a contract an actual contract if someone can simply transfer it? It' a deal between two parties.

"Timid men prefer the calm of despotism to the tempestuous sea of liberty." - Thomas Jefferson
"Annoyance is step one of thinking"
"We're all in the same boat, it doesn't matter if you like me"

"I say this because I think OWS needs a mission statement."

How about "END THE FED"?


That works too. Though we'd

That works too. Though we'd still have the problems with derivatives and other BS, we'd simply be getting the government out of it.

"Timid men prefer the calm of despotism to the tempestuous sea of liberty." - Thomas Jefferson
"Annoyance is step one of thinking"
"We're all in the same boat, it doesn't matter if you like me"