Banks are not loaning their own money because they don’t need to

The nation’s biggest banks are reporting lower and lower volumes of loans from their own balance sheet — just as I predicted 14 years ago.  The latest article is by  Shahien Nasiripour of Bloomberg and reprinted by Washington Post. The dots are not being connected. Why should they loan off their balance sheet when they can make far higher profits using OPM (Other People’s Money).


They have successfully transferred all lender risk to investors, who still have not read the fine print, and to homeowners and consumers, who have no real choice in the marketplace. The investors don’t get to own any “loans” and the “borrowers” end up with no lender, no creditor, no investor, and no loan account. Check it out. In doing so they avoid, on its face, all regulation of lending and securities sales.

This created a substantial transactional risk to investors and homeowners and epic systemic risk to the entire financial system costing the government trillions of dollars as we saw in 2008-2010. The bailout, purchase programs for “mortgage bonds” (unsecured certificates) failed to cover any losses because the recipients had no losses. The recipients of such programs received disguised revenue while the losers were left with mounting losses that resulted in the loss of homes and loss of pensions. Taxpayers and the government are still bailing out nonexistent losses.
I’ve reviewed tens of thousands of cases and I have been lead trial counsel in many cases defending homeowners in foreclosure. I won nearly all cases — even those in which I was only a consultant — based on one premise: if challenged. the claimant’s attorneys could not come up with one shred of evidence to support the existence, ownership, or authority over the alleged underlying obligation. It’s Texas two-step. They make it look like a loan to consumers but they have no lending intent and they don’t ever establish or maintain any loan account receivable on any ledger. But they fake it when it comes to foreclosure or enforcement.
When the transaction is commenced it is even possible that no funding at all occurs if the transaction is falsely billed as a “refinance.” The consumer is steered into a broker who in turn is steered to a “lender” that is acting as a sham conduit for the bookrunner manager Underwriter” (actually “issuer) of securities that are sold as AAA promises to pay periodic payments. The Payor on those certificates is the investment bank doing business as a trust that has no legal existence. The promise, when your dead the fine print is in the sole discretion of the investment bank.
The reality of the consumer transaction is that the consumer is paid for services rendered, to wit: issuing a note and mortgage along with their consent to use their personal reputation. Then because the consumer believes it is a loan, they issue the note and mortgage with the intent of acquiring a loan agreement. But they are really returning the consideration paid for their services.

So with that game why would anyone issue a loan of money from their own balance sheet? Under the current false claims of securitization (the debt is never sold much less divided into shares) all participants get guaranteed fees far in excess of any amount they ever received under conventional loans.


Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.


Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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5 Responses

  1. Just so you folks know, I always appreciate your comments but the “like” option doesn’t work for me . . . so each one has my Like I just can’t show it. . .thanks for very informative statements!

  2. Wells Fargo Ponzi Scheme collapsed, now they mass repurchase their junk. So, investors will get their money back.

    Homeowners will be executed by Judges and thrown in the streets as usual.–Company-Announces-Increase-in-Maximum-Tender-Amount-and-Initial-Results-of-Tender-Offers-by-Its-Wholly-Owned-Subsidiary/default.aspx

    Wells Fargo & Company (NYSE: WFC) today announced an increase in the previously announced maximum tender amount from $4,500,000,000 to $6,400,000,000 (the “Maximum Tender Amount”) and the early tender results for its previously announced cash tender offers (the “Offers”) by Wells Fargo Securities, LLC (“Wells Fargo Securities”), an indirect wholly-owned subsidiary of Wells Fargo & Company, to purchase up to the Maximum Tender Amount of the 11 seriesof Wells Fargo & Company securities listed in the table below (each, a “Series of Securities,” and collectively, the “Securities”).

    In addition to increasing the Maximum Tender Amount, Wells Fargo Securities has decided to eliminate the applicable Tender Cap (as defined below) for the 2.625% Notes due July 22, 2022 and the Floating Rate Notes due Jan. 24, 2023. All other terms of the Offers, as previously announced, remain unchanged. The Offers are being made pursuant to the offer to purchase dated Jan. 29, 2021 (the “Offer to Purchase”) and are limited to the Maximum Tender Amount, subject to the tender caps (the “Tender Caps”), as applicable, and the acceptance priority levels (the “Acceptance Priority Levels”), as set forth in the table below, as well as proration procedures, as applicable. Wells Fargo Securities refers investors to the Offer to Purchase for the complete terms of the Offers, as amended by this press release.

    As of the previously announced early tender deadline of 5:00 p.m., New York City time, on Feb. 11, 2021 (the “Early Tender Deadline”), $8,347,255,000 aggregate principal amount of Securities had been validly tendered and not validly withdrawn. Withdrawal rights for the Securities expired at 5:00 p.m., New York City time, on Feb. 11, 2021. The table below sets forth the aggregate principal amount of Securities validly tendered and not validly withdrawn by the Early Tender Deadline. The final results of the Offers will not be available until after the Offers expire at 11:59 p.m., New York City time, on Feb. 26, 2021, unless extended or earlier terminated with respect to a Series of Securities (such date and time as the same may be extended, the “Expiration Date”).

  3. Seems to me, a bank lending their own money would be a “portfolio loan”, you’d know who lent you the funds, not what we have here…then they, the “alleged banks” are only required to hold 10% in reserve, laughable concept, if it weren’t so destructive to consumers. The money folks are investors-Wall St…off the revenue of OUR payment streams. I could go on and on, everyone here knows the scam…note conversion(s) into commercial paper-instruments.

  4. Another quote: ” the claimant’s attorneys could not come up with one shred of evidence to support the existence, ownership, or authority over the alleged underlying obligation”

    I think this is Judicial responsibility to ask for EVIDENCE in support of claim filed by a non-existing Trust. They never do it. Standing? Nope. Maybe jurisdiction? Nope. Constitution? Nope.

    Who cares, right? Judges can do anything they want and approve fraudulent cases in the eye blink.

  5. Quote from here: – “When the transaction is commenced it is even possible that no funding at all occurs if the transaction is falsely billed as a “refinance.”” This is correct. Which means the borrower paid off nothing at the refinance. Hence, there was no MORTGAGE refinance. And, the false “Debt” remains in perpetuity. This also occurs at purchases when the prior owner’s false debt is assumed (without purchaser’s knowledge). If the borrowers were to expose this mass scale fraud, the financial institutions would collapse. And, that is why the fraud continues.

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