Open Letter to Rep. Alexandria Ocasio-Cortez — Readers, if you know Rep. Ocasio-Cortez, send this to her.

Dear Rep. Ocasio Cortez:

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Your efforts to address debt and debt forgiveness have obviously attracted a great deal of attention. What you don’t know is that you are only nibbling on the outer membrane of something that terrifies the major investment banks.

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It’s complicated. Your efforts to forgive student loans are based on the assumption that in every case there is a loan receivable account on the accounting ledgers of someone. Like homeowner transactions, this assumption is unfounded if the transaction with students or homeowners has been subject to claims of securitization. By asking for forgiveness you are tacitly admitting the money is due. This often is not true — at least under existing modern law.

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By definition, those securitization claims are false if there was no sale of the underlying obligation. Even the false claims are often concealed for precisely the reason this post has been written — it reveals that the process of what Wall Street banks call “Securitization” is actually a securities scheme that extinguishes the debt account entirely. It is a business scheme that bars the counterparty student or homeowner from any profit or revenue and requires them to accept, without knowledge or consent, concealed risks and losses that often do not appear until years later.

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You can do a lot more than you think if you drill down into the world of finance. It is mostly smoke and mirrors. The payment to students and homeowners under such circumstances was not a loan. It was partial compensation for unknowingly accepting concealed risks and losses. To add insult to injury, the students and homeowners are required to pay back the partial compensation payment they received — only because they were fraudulently induced to think they were entering into a loan transaction. But “at the end of the day,” there is no lender, no creditor, and no loan account.

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If you look at it from the broker’s point of view you can see that the student and homeowner got cheated out of compensation that they were entitled to receive but could not bargain for because they knew nothing about the true nature of the transaction. Neither the broker nor any investor maintains a loan account receivable. They fake it through the use of “servicers.” The “servicers” of course refuse to say how they handle payments from students and homeowners because in most cases they don’t receive or distribute those funds.

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If the investment banks want to keep up this charade they should be forced to disgorge some of the profits from the scheme and to disclose the true nature of the transactions — something that is already required by law. There would also need to be clarification in the law that allows investment banks to designate a virtual creditor instead of a real one — under very restrictive circumstances including full transparent disclosure as is already required by law.

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As it stands now, investment banks and their affiliates are generating an average of $12 for each $1 paid to students or homeowners in the launch of a false flag “securitization’ scheme. By lying to their remote “Customer” they get a promise to pay (Note) all of the money back plus interest and fees. And by the way, this applies to auto loans and all sorts of other falsely labeled “lending” operations.

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Show us how smart you are and use your considerable influence to reveal the faulty and fragile scheme of the investment banks. For them, the administration, collection, and enforcement are for fun and profit. It is never to pay down or post credits to a loan account because there isn’t one in many if not most cases. You have far more leverage than you think.

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Sincerely

Neil F Garfield

FBN 229318