I guess I fail to understand what difference it makes in the game of musical chairs fiat WHO ends up holding the actual mortgage paper.
I walk into a local bank for a mortgage, that bank under the current rules is allowed to lend 90% or so more than they actually have in cash reserves, so in effect, the “money” that is paid to the current owner of the house for my mortgage was created right then and there as a bookkepping entry.
The local bank is limited in the number of times they can do this, by the amount of reserves they have, so most of them sell the mortgage off to one of the GSEs ( Fannie, Freddie ) and just retain the servicing rights (you send your payment to the local bank ) for small cut of the pie. Also, this is an incentive to the local bank to write “liar loans” that they know already will be trouble down the road…so why not take a small cut, sell the paper on up the line rather than retain it and have to deal with a foreclosure later.
The GSE does the same thing…creates the money they send to the local bank out of thin air…which all worked fine as long as long as the ENOUGH of the homeowners at the bottom of the food chain actually paid their mortgages…so when thr number that did not exceeded some figure, the GSEs had trouble juggling the required number of balls in the air…so another FINO ( Federal In Name Only ) agency, the FED, steps in, and takes over the circus act.
So what ? There is no actual “cash” required along the way, unless the mortgage is sold ( either bundled by Wall St, or individually ) to an investor who really DOES have to have some cash to buy it…and for years, the GSEs have been the giant “buyers” the way I understand things…so again, what does it matter that the FED is now the one hiding the pea under the shell ?
The ENTIRE fiat system is one huge joke on the guy at the bottom of the pile…you know, the one that actually has to go work, sweat, farm, mine, somehow produce ACTUAL money to pay back a loan the banksters created in a split second with the stroke of a keyboard entry…and the crux of the joke is while the guy at the bottom is sweating to make it, paying back those fake “dollars”, enough new dollars must be created so he/she can pay the interest on the principle, so more “money” is created to allow that, which dilutes over time, the value of that the sucker at the bottom might save ( inflation ), making it more worthless all the time.
Yeah…physcial slavery pretty much ended in the 19th century, because the banksters found a WHOLE LOT BETTER system in which they don’t have to buy, feed, house or care for the slaves, and the slaves are given the illusion they are free. We’ve come a long way, baby.