Home loan account bank deception starts with the wording… Terminology used by banks based on a traditional understanding of “lending”. Today’s mechanics behind “home loan” and “loan account” processes are covered in a mysterious veil.

Many people still believe that when you go to the bank for a “home loan,” the bank opens its vaults and lends you physical money.

And so “Home loan account” reflects a long-standing legal and financial convention. Many people think of a “loan” as a transaction in which a lender gives(lends) the borrower money in exchange for a promise to repay it with interest. Hence the words “lender” someone who lends, and “borrower” someone who borrows.

Lender v Borrower

It’s not hard. You want to mow the lawn, and your mower’s being repaired, so you ask your neighbour “the lender” to lend you his mower. And you agree to fill the tank when you return the mower that you “borrowed” from your neighbour.

Imagine the neighbour handing you a picture of the mower, and saying, “there you go, mow the grass. But make sure you give me a gallon of fuel in return!”

The banks still use this terminology “lender” and “borrower”, because it’s familiar and has been legally recognized for centuries.

But modern banking doesn’t involve the direct transfer of money in the same way.

Because when the bank gives you a “home loan,” they’re providing you with “credit”.

This “credit” is based on promise of money that you can use to purchase a home, even though they don’t physically hand you any cash. Like going to the local restaurant, and asking them to put your meal on “a tab”… And next time you’re there, you’ll pay the “tab”, and clear your debt.

Only with the bank, it takes 25 years. And with the restaurant, if you don’t pay, they miss out on selling the food to someone else to recover the costs of the food you ate.

What does the bank lose? Nothing. Because they have no “skin in the game” from day one.

So when the bank calls it a “loan,” they are describing the act of credit creation.

From a legal perspective, you’re borrowing money (or its equivalent). And the bank’s agreeing to provide you with the funds to buy your home.

Home Loan Account Bank Deception

These days, it’s all “smoke and mirrors”, because the bank’s not actually lending money that it has on deposit. Instead, the bank creates “credit” (or money) that you can use. And the bank provides you with the ability to use that credit (or digital money) to purchase your home.

From the “borrower’s” point of view, it feels like receiving money in the traditional sense. Because you’re able to use those (newly created) “funds” to make a purchase, even though it’s “created” as part of the loan process.

The point being that the bank’s providing the means to facilitate a transaction, without using any cash. It’s a medium of exchange loosely called “money”, that exists digitally or on paper, “created” as part of the loan agreement.

The bank uses the term “loan account” as a formal way of keeping track of the transaction. From the bank’s view point, it’s creating an account for you, recording the loan balance, interest, and payments made.

Your “loan account” is essentially a ledger entry where your “debt” is tracked… Even though the actual money didn’t come from their existing funds.

So this “loan account” represents the amount of credit you owe the bank. And they call it a “loan” because it’s an arrangement in which you borrow money (or credit) and promise to repay it over time, with interest.

Bank’s Assumption-Based Deception

Most people understand a “loan” as a process in which you receive money that you have to pay back.

So, for practical purposes, calling it a “home loan” makes it easier for borrowers to understand the arrangement.

While banks deceive us with a process of money creation, the everyday person perceives it as “borrowing” money. And the bank uses terminology that aligns with this deception.

Additionally, calling it a “home loan” or “loan account” means the banks don’t have to explain the real story around fractional reserve banking and credit (money) creation.Calling it a “loan” also makes it sound above board and legal.

And the term “loan” implies that you are “borrowing” funds and are therefore obligated to re-pay them.

Imagine when everyone wakes up and realises that you cant re-pay something that never existed in the first place!

Which is why, when people run into financial difficulties, the banks and the courts focus on the mortgage contract.

Your signature on an agreement to make regular payments regardless of where the “money” or “credit” originates.

Even though the funds might be created through a bank’s (smoke and mirrors illusion) credit mechanisms… The “borrower” is still legally responsible for re-paying the amount under the terms of the loan agreement.

Which raises another question.

Who is “the borrower”?

Because without you wanting a loan, the bank couldn’t get your signature to create the “money” or “credit.” And then demand you make re-payments.

Many people challenge the banks and win. However, in order for the banks to keep the deception hidden, they pressure those people into signing non-disclosure agreements.

What will you do in that situation? Sign the non-disclosure, take the “hush-money” and live a happier life? Add your comments below.