June 22, 2012
The Instrument and Identity Theft
The bank or the mortgage company considers your signed promissory note as an asset, and once accepted the bank then moves to balance the banks books by putting an equal amount of credits (bookkeeping entry) into your account creating the liability. The bank cannot lend anyone money from its customer’s deposits or from its reserves. Only loan credits can be deposited into an account using fractional banking as licensed by the US Treasury that regulates banking.
When an examiner visits any bank, the examiner first determines the amount of deposits, and then examines the bank’s T-Chart to determine if the bank is within the set lending limit. A bank may issue credits and can never lend money. The credit issuing limit is a multiple of the amount of deposits on the bank’s books.
The promissory note outlines the required number of Federal Reserve Notes earned by the borrower’s labor that must be returned to the bank in order to satisfy the conditions of the promissory note. The amount and length of time for the return of Federal Reserve notes as satisfaction of the note requirements are outlined in the document itself. Once the note is paid in full within the timeframe as outlined in the note itself, then the bank must surrender the note as paid in full, and must release any notice of lien as recorded at the courthouse, collateral used for liquidation in the event that the terms and conditions of the note are not satisfied exactly.