Banksters Or Gangsters?

The Banker's Code Webinar - Review

If you're considering ordering the book, The Banker's Code, by George Antone, I strongly suggest that you read this first.

I watched the author's webinar, "The Banker's Code", wherein the author and his partner espouse private lending using OPM, OPE, and OPT (other people's money, experience, and time).

The private lending market is hot (see concluding statements for more). That being said, a funding source is not revealed, except that you can "tap into it with one phone call". You'll have to buy the author's course, which only makes a mention of "where to find OPM sources" in a three-day training seminar.

They state that banks make money out of thin air.

That's true. You and I would go to jail.

Unmentioned in the webinar is "fractional reserve lending". The author substitutes the word "leverage" from an "OPM source".

For example, with a reserve lending rate of ten percent, a bank with $100,000 of reserve assets can write $1,000,000 in loans. The reserve rate is set by the Federal Reserve. Moreover, most people do not realize that a bank loans money with the stroke of a pen -- a simple book entry to create the loan and the money out of thin air. And don't forget, your home can be seized if the loan is not performing.

A performing loan is a bank asset. Although the bank could make a play on a positive interest rate spread by borrowing against the asset at a lower rate and lending at a higher rate, in today's low interest rate environment, most mortgage loans are sold.

So let's review:
(1) Fractional reserve lending allows a bank to have just ten percent in liquid assets on deposit.
(2) The bank inflates their reserve ratio by a factor of ten to write loans (multiplier effect).
(3) They create the money out of thin air, for example, a mortgage loan.
(4) You make monthly payments for 30 years and end up paying mega bucks in interest.
(5) Most likely, the bank sold your loan.
(6) It's perfectly legal.

Banksters have nice jobs. Would you agree?

To conclude, if you can secure the OPM funding sources, locate borrowers, write loans that are accepted by your OPM sources, or do equity financing, you're off to the races.

In today's post-bubble-housing climate, traditional lender underwriting is strict. The Dodd-Frank bill also adds another five-to-ten percent reserve on owner and non-owner occupied loans, respectively. Most banks are not interested in tying up their assets with more reserve requirements. As a result, the private lender market has exploded. Moreover, we are in a period of wealth transfer, wherein hedge funds and private investor partnerships are buying swaths of REO (bank-owned real estate) property.

So the timing is good. But do your research. There are many cheerleader book reviews, yet as you read into all the reviews, you'll find that practical application is scant. Be sure the principles outlined in the book are actionable. You may want to spend time at the author's website first.

~ ROC Realty Network