Is Mortgage Crisis the Mother of Opportunity?

Whenever any Form of Government becomes destructive of these Ends (to secure rights of the people), it is the Right of the People to alter or to abolish it and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness. — Declaration of Independence
Dees Illustration
Anthony L. Hargis
RMBS is the acronym for Residential Mortgage Backed Security; it is the beast that brought the financial markets of the world to their knees in 2007; and bedevils us to this day.  Some people call the result an unprecedented crisis.  I, also, thought so.  Now I’m beginning to look at it as an unprecedented opportunity – if liberty is your cause, that is.
In particular, by designing, orchestrating and implementing this crisis, I believe that banks and Wall Street delivered to us the next American Revolution on a golden platter.  But it will all go to waste if we, who favor liberty, fail to recognize this gift.
It has the potential to right every wrong men can name; to provide, almost immediately, enormous funding to seekers of truth and liberty to carry out their work.

It will be difficult and easy at the same time: it relies on laws of property and redress that are long- and widely-established; it is easy in that the former law is known to all; difficult, because the latter has been erased from our history and law books – and will require a period of learning.

Before I give the key that unlocks these opportunities, we must review several facts of history. First, just to make sure we discuss the same thing, the essence of revolution is the redress of grievances.  From this perspective, I see the on-going financial crisis as an opportunity to redress a wide variety of grievances.  If we take advantage of this opportunity, we will turn society right side up on a scale without precedent; if we only complain and bicker, we will be carried inexorably into the next Dark Age.

So, let’s start with the immediate past.  In the fall of 2008, Congress passed legislation that gave hundreds of billions of taxpayers’ money to banks and Wall Street despite letters, e-mails and phone calls ranging between twenty- and one-hundred-to-one against the measure.

Time and events since have demonstrated that banks and Wall Street have conducted a general plunder of main-street America; and that they and Congress have “become destructive” of the original purpose of American governments.

In particular, 1) banks have extended some $2.7 trillion of loans to people who, by long-established lending standards, would never qualify for such loans and 2) those same banks have clouded, or destroyed, chains of title for fifty to sixty million mortgages.

In the first instance, banks’ employees (from CEO’s to clerks) have thrown away money entrusted to them by bank depositors who foolishly trusted banks to safeguard their money.  Regarding the second instance, banks have produced a situation where fifty to sixty million properties that do not have good title.  When a property changes hands, the first requirement is a valid chain of title; without it 1) homeowners cannot prove that they own their houses; 2) when they finally pay off their loans, lenders will not be able to give clear title; and 3) a knowledgeable buyer will not risk money to buy their homes because of these uncertainties.

In both cases, banks have violated principles of property law that have been well-established for over four thousand years.

Such, in very broad strokes, is the nature of the mortgage crisis.

If banks had botched a dozen mortgages, it could be passed over as inevitable errors or freak accidents where several people are involved on a single event.

But where fifty to sixty million mortgages have been so affected; where bonuses were paid a) from bank executives to loan brokers on a system-wide basis to violate long-established loan standards; b) to credit rating agencies to rate junk paper (subprime loans) with the highest possible rating; c) where every conceivable principle of ethics, common sense and property law were violated, it points to the conclusion that every act was done with malevolent intelligence; for, if actors in this crime and folly were simple idiots, they would have done some acts right and some wrong; but, here, every conceivable action was done wrong.

In full context, these facts depict a crime unprecedented over the last four thousand years.  The essence of that crime is simple and fundamental beyond measure.  It is simple in that it consisted of the failure to properly execute documents that demonstrate legal authority over property.  It is fundamental in that such documents lie at the base of a body of property law that enables ordinary men to convert the value of their homes and businesses to liquid assets for the purpose of innovation, business or vacation.  It is a process that is available in perhaps two or three other countries; and no where is it – or, rather – was it more strictly adhered to than in America.  This was one of the major factors that enabled a few English colonists to found a society in a wilderness and set in motion an unparalleled experiment in human liberty. (See “Welcome to the Machine” for a good summary of the debt crisis and its effect on this history of property law.)

In only fifteen years, the banking industry has destroyed the foundation upon which this country was built – probably beyond repair; and only a few noticed.

It was mandated by Congress with the Community Reinvestment Act (as amended); it was facilitated by the Federal Reserve with unrealistically low interest rates; and, thru the mechanism of the income tax – which invariably selects idiots and thieves – engines of commerce were staffed by people who would rape their own children, if only Congress would authorize it.

In prior ages, when foundations of civilizations were destroyed, momentum of the destroyed life-force would carry the civilization forward another few centuries.  That was before central banking – or, rather, before monetization of government debt.  Today, we have, on a world-wide basis, enough government debt to cannibalize following generations to the end of time; see my article, “Bad News for Alternative Health…” (Available by e-mail request.)  This will allow the destruction, that would normally occur over centuries, to, instead, compress into a few weeks, perhaps months.

Once major facts of this crime are identified, it should not be difficult for a reasonable man to see that they “evince a design to reduce them [the several states] to absolute despotism.”

If ever there was an event that required that we “alter or abolish” American governments, now is the time.
There are many people who have done adequate work to discover and explain different aspects of this crime.
But all struggle when they try to design a correction.

Some want to turn the job of correction over to regulators; see the report by the “Financial Crisis Inquiry Commission”, which details dozens of examples of regulatory agencies that were complicit in such failures.  Do a word search also for the report, “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse”.  Each will give you 650 pages of blurry-to-adequate details of the complicity of banks, regulators, credit rating agencies, loan brokers, appraisers, media, Congress and many others.
Recommendations made by these commissions were very Biblical: “Well, they meant well… we think they should be allowed to do it again.”

Of course Congressional staffs would think they meant well; they were enforcing a mandate of Congress.
Some observe, owing to clouded titles, that banks cannot demonstrate rightful authority to foreclose on a delinquent loan – or, even to collect payments.  In property law, such a loan does not exist – it is void.  These observers then leap to the conclusion that fifty to sixty million mortgages should be voided, leaving as many homeowners with property free of debt.

But, a solution that creates a new set of victims is, by no possible interpretation, an act of justice.  Probably 95% of the money advanced to homeowners or buyers came from bank depositors – the other 5%, at most, came from bank shareowners.  Where a mortgage is voided, the loss is transferred to bank shareowners first – and, when their equity is wiped out – to bank depositors.  This occurs if the bank absorbs the loss.

However, if government reimburses banks for such losses (thru bailouts or deposit insurance), a new set of victims is created: current or future taxpayers, depending on whether the bailout is financed by taxes or by government debt.  This latter “solution” is the more heinous; for, government debt is the process by which one generation financially cannibalizes following generations.  Of course, it is also the easiest; for, unborn Americans have neither voice nor opportunity to complain.  Oh, yes, there may be a dozen men in this world who recognize the cannibalistic nature of government debt… but who listens?

Thus, if all fifty to sixty million mortgages with clouded titles were voided, it would represent a gigantic plunder of the thrifty and laboring classes for the benefit of the spendthrift and criminal classes.  This would gut every banking system on the planet and trigger the next Dark Age.

Some observers call for the arrest of those who perpetrated the crime – presumably after some kind of trial.  This only increases the victimhood of taxpayers as governments would spend one to five million dollars for the prosecution of each accused party; and then spend $40,000 to $50,000 a year to lodge convicted defendants in near country club estates complete with swimming pools, basketball courts and baseball diamonds – and conjugal visits; these demonically deranged individuals must be allowed to propagate their kind.  After this vacation of two to three years, convicts will be released to enjoy their booty of fifty million or so, free of official harassment.

Thus, convicted defendants are lodged, fed and entertained for a few years free of charge.  The real penalty is laid on taxpayers – without the semblance of justice.  Something seems to be wrong here; give me a few days… maybe I can unravel it.

Other observers recommend that fines be imposed on wrongdoers, which, according to long-established custom, will be done by the Roman model.  By this method, a member of the Senate class was appointed as governor of a province and was expected to plunder it to a Stone-Age condition.  When he returned to Rome, he was prosecuted and convicted of corruption; it was part of the appointment agreement.  Judges and senators took one third of his booty, lawyers (for both sides) took another third and the former governor was left with the remainder.  Oh!  He was ordered to donate a hundred shekels to a charity for the poor and controlled by wives and children of senators, judges and lawyers.

The whole process salved the conscience of the guilty class and deluded the masses into thinking that they also shared in the booty.  And, the victims… ah, who cares?

By this method of punishment, fines paid by perpetrators are not penalties; but rather bribes for legislators and judges, bureaucrats and editors for legitimizing and glorifying plunder and genocide.  It is genocide in the sense that, when money is taken from a man with nothing in exchange, it is more difficult for him to provide for his family; thus, bringing upon him a lack of companionship with his family, ill health, and early death – both emotionally and physically.

When an entire province is left a wasteland, it is genocide.

In today’s world, bankers and corporate officers are Roman senators; we are serfs bought and sold with the land of a conquered province; and US Treasury securities, taken by bankers as their booty, are the gold and trinkets, fine furniture and rugs, pomegranates and apricots, slaves and orphans (to staff child harems of ruling circles) brought to Rome by governors of provinces.

Treasury securities were the means by which the government raised the cash to bailout bankers and Wall Street; this means that the burden of the bailout will be laid on generations of unborn Americans.  Owing to the size of the debt of American governments, this “visiting the iniquities of the fathers upon the children” will continue to the end of time – unless we put a stop to it.  Modern custom, in other words, greatly exceeds Jewish law, which only requires cannibalization to the third and fourth generation; see Exodus, xx, 5-6 and xxxiv, 8-9.  Jewish law-givers, you see, were ignorant of the marvels of central banking.

When we survey the full spectrum of proposed remedies, we see a mass of confusion and impotency – or deliberate attempts to sabotage redress.  They all either create new sets of victims, enrich perpetrators, leave injured parties without redress, or any combination of these results.

These are not solutions; they are new crimes; and no civilized man would accept them.
The criteria: as usual, to describe a problem also points to the solution.  A proper redress should 1) not create new victims; 2) make all perpetrators accountable for what they have done and 3) restore all injured parties to their original and rightful condition.

A redress that satisfies this criteria is, simultaneously, exceedingly easy and difficult.  The easy part is the procedure by which it can be done; the difficult part is to overcome the nonsense that we must wait for perpetrators to investigate, prosecute, judge and punish themselves.  Men have wished for this remedy for ten thousand years – and history has yet to report an example of it.

The easy part
To design a correction, we must start with three major facts 1) money was borrowed, 2) money is owed and 3) banks will not, or cannot, demonstrate rightful authority to collect such money.

They will not produce valid documents because to do so would also provide evidence of criminal activity on their part; they cannot because they have violated long-established lending procedures by failing to properly execute necessary documents.  If this were an isolated case, the normal result would be to void the loan.  This is not possible, however, where fifty to sixty million mortgages are involved.  It would gut every banking system on the planet.

Two major questions thus arise, ‘Who should pay this money… those who were defrauded, or those who perpetrated the fraud?’ and, ‘Who should collect the money… those who perpetrated the crime… or those who have the interest to correct it?’

It should be clear to any casual student of history that, if toxic mortgages are left in possession of banks, they will conduct another general plunder of the country five or six times greater than the last in as many years.
Since people sent letters, e-mails and phone calls to congressmen one hundred to one against the last bailout/general-plunder, I think I can safely assume that another general plunder of the nation would be equally unacceptable to most people.

Instead of leaving toxic mortgages with banks, I suggest that “we the people” take possession of such mortgages according to the above-quoted passage from the Declaration of Independence.  They will then have the interest and the power to design and execute a remedy in accordance with the criteria set out above.

My suggested solution includes a very common practice: a second mortgage “on top” of the first.  It would be executed in favor of “we the people” thru the mechanism of a First-Amendment assembly (more on this later).
Major steps of this procedure would have the assembly,
  • One, Negotiate a market-related debt for the property in question;
  • Two, properly execute a promissory note and deed of trust;
  • Three, begin collecting payments from the homeowner;
  • Four, distribute payments in two directions 1) to those who provided the original money (bank depositors or shareowners) and 2) to individuals or groups who are investigating the mortgage crisis and a few other grievances;
  • Five, when sufficient evidence is collected pertaining to identification of perpetrators, begin a prosecution of them;
  • Six, upon conviction, collect damages from estates of those convicted;
  • Seven, use this money to pay all costs of prosecution and to restore all injured parties to their original and rightful conditions.
There are many important observations to notice about the above procedures: we don’t need anyone’s permission to perform any one of them, except parties involved.

In particular, people commonly execute second mortgages.  Sometimes they pay one and not the other.  In general, American Founders did not ask king George if they could take matters into their own hands: they stood in the law of nature.  Thus, we do not need to ask anyone whether or not we can help finance various investigations of grievances.

Here is an opportunity for people involved in truth movements to gain substantial support for their work.  Name your grievance: events of 9/11, attack on USS Liberty; missing trillions from DoD, HUD, SSA; illegal wars; suppression of natural health remedies; the transfer of secret military technology, and the Panama Canal, to Red China, South American drug cartels and Chinese Triads – (see the Congressional report, “The Financial and Commercial Impact of the Panama Canal Treaty”).  These are potential sources of trillions of dollars for restitution to injured parties and for compensation for the work of successful prosecution.

All these and many other grievances have easy, but time-consuming, solutions; and they are all impossible as long as aggrieved parties remain ignorant of their power through the right of assembly.

With solutions that I suggest, people do not have to march in streets, wave signs, collect a million signatures, plead with sexual deviants (some call them congressmen) or a dozen other historically fruitless activities.  All they have to do is calmly, and, with due diligence, arrange their financial affairs so they financially support redress of grievances, rather than a continued perpetration of grievances.

Furthermore, if banks dare to challenge what we have done, our documents will have been done properly; their documents will be the stuff of black folly.  Besides, how difficult can it possibly be for a judge to weigh our plan of redress against banks’ plans to conduct another general plunder of the nation?

In some or most cases, the homeowner could never pay back the full amount of the original loan.  With our solution, we will, on behalf of bank depositors, collect the difference from those who orchestrated the financial crisis; and, in so doing, avert another Dark Age.

The difficult part
This whole procedure must be performed by First-Amendment assemblies.  The historical definition of an assembly is “a body of private men who exercise sovereign power within a particular territory”.  Such assemblies have the power to raise armies, send ambassadors to other assemblies (other states), to raise money, to act as a supreme court.  However, the mere establishment of an assembly will not give it these powers.  Such powers are accumulated as the assembly gains members, knowledge and experience.

An assembly is like any other fact of reality or invention of man: it can be used properly or improperly: it can be used to further human life or to destroy it.  Today, assemblies are used exclusively by the criminal class of mankind.  Their assemblies currently go by names such as American Medical (Bar or Bankers) Association, Council on Foreign Relations, Tri-Lateral Commission among others.  Men of reason and justice do not use assemblies because they have no knowledge of them.

The business of assemblies is the redress of grievances.  If you will notice, the American Revolution was powered by a large network of assemblies: from town and county meetings, to state conventions, to Continental Congresses.
Nothing has proven to be more effective at redress of grievances than assemblies.  But to perform this work, members of assemblies must have a working knowledge of the history, law, and technology of assemblies.  This can be learned nether from Supreme Court reporters, law reviews, nor current history books.  To learn this knowledge, there are two choices 1) study my book, The Lost Right, Edition 3.5, or 2) read eighty to one hundred thousand pages of original history and law books; and then spend twenty or so years to sift and organize the findings.
The redress I have proposed here is not an action people should rush into.  Study my book and its sources; have it proofed by lawyers and professors; take a few months to let my information settle in your mind; then act.  Do the same with my articles after my ‘Bio’; they add urgency to redress.

The English first publicly declared the right of redress in section sixty-one of the Magna Carta.  
However, it took them four hundred years and oceans of blood to develop reasonably effective procedures to obtain redress, which Americans used in their great redress – otherwise known as the American Revolution.
To me, it is preferable to learn lessons of our philosophical ancestors rather than attempt to re-invent what prior ages have done, as we watch new oceans of blood wash over the land.

Anthony Hargis is a free market entrepreneur and writer who, since 1976, offered a gold-backed banking service to allow his customers to boycott the Federal Reserve System.  He began researching and writing about the lack of constitutionality of the income tax and other government cover-ups in 1995.  His writings apparently irritated several government officials and in 2004 he was jailed for almost six months.  His business (including all his customers’ property) was subsequently confiscated by the IRS without a trace of due process.  He can be contacted by e-mail at
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