Is it possible that all mortgage contracts are void and foreclosures invalid?

The following article should probably be considered for entertainment or educational purposes only. It is rare to find such an informed judge working for the government who puts the interest of the individual above the financial interests of the banks and their system of credit and money creation. Homeowners facing foreclosure should be fully aware of this case and the arguments, but be warned not to take any of this as actual legal advice.

I first came across the very curious case of Jerome Daly through an article by Ellen Brown, author of the book debt network. It deals with a 1968 Minnesota foreclosure case that has yet to be overturned, and the issues go right to the heart of the sleight of hand on which the banking system is built. The case also presents an optimistic view of how people can take back the power to create money from private banks.

Jerome Daly was a homeowner living in Minnesota who defaulted on his mortgage. The lender, First National Bank of Montgomery, of course, sued the man for foreclosure. Daly presented his argument to a jury as to why he owed the bank nothing.

Essentially, it argued that the bank had not provided any consideration for Daly’s promise to repay the loan. Consideration is one of the requirements for a valid contract, and without it, a contract is void. Daly argued that the mortgage contract was void and did not need to be repaid because the bank had not actually given him any money. The lender had created the money out of thin air in response to a promise to repay the loan.

This credit, Daly argued, was not actual money that counted as consideration and therefore did not need to be repaid. Without valid consideration, the mortgage contract was null and void and nothing was owed to the bank. Surprisingly, the jury agreed with him and declared that the mortgage was not a valid contract.

The judge and a representative who testified on behalf of the bank also agreed with Daly’s argument, in effect. The bank president, Mr. Morgan, admitted that money did not exist until Daly received the mortgage, and that money was created out of thin air.

The judge wrote a supporting decision in the case agreeing with Daly, writing: “Money and credit first appeared when they created it. Mr. Morgan [the bank’s president] admitted that there was no United States law or statute that gave it the right to do this.” Therefore, lending the money to Daly in the form of a mortgage was not valid consideration. The bank did not even have the authority to create money out of thin air in accordance with any known law or statute.

This case has been suppressed much more than argued against, and has not been overturned. What this means for homeowners facing foreclosure is that they may not even owe their bank any money, and that the lender is trying to keep the house to pay off an illegal contract. This case is, quite possibly, a get out of jail debt free card.

But that does not mean that local judges allow this type of rational argument in their courts. Just because the mortgage contracts can be shown to be invalid and the lending system a scam does not mean that corrupt court systems allow the truth to be told about the equally corrupt banking system. Political power and money go hand in hand.

So it should come as no surprise that people who have used Daly’s arguments to protect themselves against foreclosure have not always been successful in finding a court that will listen. Rubber-stamped foreclosure lawsuits make good money for attorneys in the form of legal fees and for local county courts in the form of filing fees. (Of course, neither of these parties seems to be aware that the money they are helping to steal was created out of thin air, and they are selling other human beings to an illusion.)

Homeowners, as I mentioned earlier, should be aware of this argument, because it shows that the banking system is the scam that it is. Now that so many more homeowners have received bad loans and are losing their homes because of them, will they rely more on the argument of a void mortgage contract and the unconstitutionality of the monetary system itself? That remains to be seen, but it’s a compelling, rational, and very interesting argument that Daly made. Even more interesting is that the judge and jury agreed with him.

But, on the less interesting side there will always be the corrupt judges, lawyers and others who profit from the bank scam. As one of them said regarding this topic: “If I let you and everyone else do that, the whole system would collapse… I can’t let you go behind the bank counter… We’re not going behind that curtain!” The “whole system” supports the banks and the government. Why should we expect them to help defend people against illegal acts and contracts?