Banks Create Money That Doesn't Exist

This is the part most people don't get. A bank uses "fractional reserve". For example, they have $ 1 million in actual cash, but they loan out $ 8 million. They basically create $ 7 million out of thin air. They can do this, because then know everyone with money in the bank is not going to come and get it out all at once.

Now, in the case of the last mortgage crisis, they were actually packaging your mortgage, attaching it to several other mortgages, and then quickly selling it off, just like a security. People's mortgages were ending up being owned by South Korean banks, and the trail of who owned the mortgage was so convoluted, it was impossible to follow. This is where the smart homeowners had the advantage. You call their bluff -- force them to actually prove they own your mortgage, and 9 times out of 10, they had sold it off already and had no actual claim to the home. A lot of people kept their homes this way. Always force whoever is coming after you to validate the debt. Make them prove you owe it to them.