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Originally Posted by gldskr
The borrower's credit had to be removed from the source of the funding. The funds are still fiat but have been created from someone else's credit...
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And that credit is staked in the borrower's credit. Ergo when that party became the litigant, the letter of credit was proven. The same setoff was simply shown.
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Originally Posted by David Merrill
Goldskr is simply a banker.
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I assume this was tongue in cheek.
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I meant that more literally that most readers expected. FRNs are the stock certificates of the Fed. Anybody carrying FRNs qualifies to be a banker. And furthermore if you own stock in any company, you are expected to be a responsible fiduciary - especially with FRNs, since they are really the only stock certificates around expected to go down in value - while you, Mr. Banker gain and profit on the fractional lending that caused the devaluation.
This third party simply took the risk of lending upon the borrower's credit. So when the LoC is tendered and the homeowner now owns the home, a new proceeding is started - this time with the true lender. The homeowner could simply offer another setoff by LoC or simply Refuse the summons for Cause and attach proof the LoC was tendered to the facade lender.
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Originally Posted by gldskr
The bank still retains the risk until the note is sold. The risk the third party obtains relates to their transaction with the bank only.
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That is why I showed the note. When the note is sold, then whoever bought the note is holding the borrower's credit - the risk.
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Originally Posted by gldskr
Contrast this process where one applies for FRN's and that of unsecured revolving credit where one applies for credit. In case of a breach, in the former the bank repossess the collateral; in the latter their only remedy is to terminate the credit. The object of the contract is different, so must be the remedy.
gldskr
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Fancy sophistry is still just sophistry.
In the former, the homeowner tendered a letter of credit for the setoff. And in the latter, same instance, the true lender began a foreclosure process. The suitor simply R4C'd the summons and attached proof he had already tendered the LoC to the facade bank.
Regards,
David Merrill.