RISE AND DON

By Don Kilam | DK’s Private Business Circle

“Securitization is illegal” — it is only illegal for private corporations. Securitization is the process of homogenizing financial instruments into fungible securities so they can be sold on the securities market. When you sign a mortgage note, it starts as commercial paper. After securitization, it becomes a registered security. The banking system and the government are doing it as usual business.

And here is the secret: it is all accounting. Banking, civil court, criminal court — it is all accounting. If you don’t know the accounting regulations, you can’t give them the proper instructions for settling and closing.

What you really want is RECOUPMENT.

PART 1: IT IS ALL ACCOUNTING — THE FRAME

The banks are mandated by Title 12 USC to follow GAAP and GAAS — generally accepted accounting principles and standards. FAS 125 (securitization accounting), FAS 140 (offsetting of financial assets and liabilities), FAS 133 (derivatives on hedge accounts), FAS 5, and FAS 95 (cash flow statements). These are the resource materials for understanding the whole process.

The note is no longer a negotiable instrument after securitization — it is a SECURITY.

Recoupment means: (1) the recovery or regaining of expenses — applying the setoff so you get back what you gave and what you are entitled to; (2) the withholding for the equitable part or all of something that is due. This is all equitable action in admiralty-style instruments.

PART 2: THE IOU IS AN ASSET — THE PERSPECTIVE FLIP

Black’s Law Dictionary: an IOU is a memorandum acknowledging a debt — a due bill. A sight draft is a draft due on the bearer’s demand or on proper presentment to the drawer.

This is colorable. Who is holding the debt? They are not saying from which perspective it is a debt: theirs or yours.

The party receiving the IOU is the debtor, because the IOU is an asset. It is an instrument, and YOU are the originator. You have monetized their system with your signature.

An IOU is an asset instrument, not a liability instrument. This is one of the places where your perspective has been changed on purpose.

Under the Constitution, the government was never given authority to create money. That power is reserved to the people. Article I, Section 10 restricted the states from coining gold. So the corporate government relies on the deception of people to create money: people sign an IOU, a promissory note.

It is not a debt instrument to the one who created it — it is an asset. The creator can pass it on for someone else to use. The property belongs to the creator; the holder is merely using it, and any proceeds that come from it should be restored to the creator.

The whole deception is to make you believe you are the debtor and the slave and they are the creditor at all times. This is not true.

PART 3: THE DUALITY — TWO SETS OF BOOKS

THE ACCOUNTING LEDGER HAS TWO SIDES. The bank is the creditor on the receivable side — their asset side. YOU are the creditor on the liability side — the accounts payable. You can use your accounts payable as an offset or counterclaim to their financial asset — the receivable.

The bank or the court is using the receivable side of the accounting ledger. That is what they are charging you with. On the liability side, because of HJR-192 and what happened to the gold, you are the creditor.

THE TWO-LEDGER TABLE:

Two sets of books — like the Mafia. They only use the public books when they make a claim against us: to determine how much we know about our claims on the other side of the accounting. It is up to us to bring the claim or waive the remedy.

PART 4: THE CASH RECEIPT — 12 USC 1813(l)(1)

Title 12 USC 1813(l)(1): when you deposit a promissory note, it becomes a CASH ITEM. It becomes the equivalent of cash, because you have a cash receipt. Under FAS 95, when they do a credit to a transactional account — a liability account on which you are the creditor — they give a cash receipt to the customer and a cash payment to the bank, because it is cash proceeds.

When you make a deposit, it is a cash receipt, a cash proceed. Everything becomes a cash proceed in commercial law. They give you a credit to your account — a cash receipt to you the customer. Then they do a cash payment to the bank. Then the bank sells the note.

The bank owes you the money. Nobody is bringing up recoupment as a defense. You waive the defense and they go to collection on the receivables.

PART 5: WHAT THEY DO AT CLOSING — THE WAREHOUSE AND THE SPV

When you sign a promissory note to create the mortgage, at closing they have ALREADY sold your note to the warehousing institution. The warehousing institution brought money into the bank when they bought the note. At closing they take the money and close out the account on one side.

The bank forgot to tell you that you no longer have a liability on their receivable side.

They are required to file an FR 2046 balance sheet under Title 12 USC 248 and 347 — quarterly or weekly, with the Federal Reserve Board. The balance sheet shows the assets and liabilities they use in the accounting. The liabilities would be your promissory note — it is a liability because it is an asset to you.

Securitization is the process of transferring all the liabilities OFF the balance sheet. They can do this because you never ask for them. They have everybody conned into believing we are debtors instead of creditors and do not know to ask for our assets. We never ask for recoupment. So why carry the payables on the books if they have been abandoned? Why not write them off and sell them for more cash?

This is called off balance sheet bookkeeping. They are not showing the liability side of the ledger or the accounts payable because it has been moved to someone else’s balance sheet.

Why is it called CLOSING? Because they pay off the loan in its entirety. The debt is actually extinguished. The house was paid for at closing with your negotiable instrument on one set of books.

The bank then becomes the SERVICER for the account. They are not paying principal and interest — the payments are profit to the holder of the note. They are using the note to expand the money supply.

If you stop making payments, no one has been damaged. The only reason they collect for 30 years is because you are a fool. We are responsible for agreeing to this contract.

Banks securitize mortgages by selling them to an SPV — a special purpose vehicle, a trust — then create bonds of trust assets to sell through the depository. The bank cannot foreclose on the note because they are not a holder and lack standing. The mortgage contract requires payments, which makes the note NON-NEGOTIABLE. A negotiable instrument can have no restrictions, terms, or conditions. They are foreclosing on the contract under common law, not the note. A holder in due course of a non-negotiable instrument is not possible.

At closing, the note goes into the SPV, which takes legal title and creates a new instrument in place of the note: securities and bonds, which are registered. They are hiding the pea under several shells so you don’t know where it is.

PART 6: THE COURTROOM — THE JUDGE HOLDS THE PAYABLES

Civil and criminal court procedure operates the same as the bank. There is no difference between a civil case, a criminal case, or a mortgage deed and loan purchase.

The clerk has the receivable side for the corporation; the judge has the payables. The judge is holding accounts payable under HJR-192 for all the people that come before him. The judge is not required to be a witness or bring pleadings — he is a referee. The party aware of the payables is not the same party handling the receivables.

The judge does not have to do the setoff unless you raise the issue or defense. We have the right to waive it. So the judge is the priest receiving the sacrifice for the corporation.

When a person is charged with speeding, they are given a charging instrument — the same as a bank’s claim showing a failure to make mortgage payments. It is a commercial entry from a corporation showing a liability on your part that is an account receivable, with them in the capacity of creditor and you appearing in the capacity of debtor.

The clerk has an accounting charge against the strawman, but YOU are operating the account. It is your responsibility to bring in recoupment on behalf of the real party in interest — you — because you are the ultimate creditor if you raise that claim against the liability side of the account.

A notice of lien or levy has no evidence of a claim. It is just a charge. A notice is a claim of jurisdiction. Don’t argue — argument creates the claim by default. Failure to do a specific negative averment of the facts alleged constitutes an acceptance of that fact as far as the courts are concerned. A notice of interest matures into an agreed claim. You must respond timely with a counterclaim — your notice of interest — under admiralty rules.

The government and their agents are here to test us. If we want to pass the test, we should have a claim for setoff. We must act like creditors, not debtors.

Under civil rule 13, the mandatory counterclaim based on the same transaction: if you fail to bring it, you have waived it. Under civil rule 36, if they don’t answer your discovery requests, they have ADMITTED them. The attorney saying “discovery and records from auditors do not constitute admissions” is telling the court that the bank’s records kept in the due course of business are not admissions. They are hurting.

PART 7: THE COLLECTION AGENCY LETTER — THE DATA INTEGRITY BOARD

The letter, from the class:

> “I am writing regarding your recent letter in regard to your client XYZ CORP, being the alleged creditor in the amount of $1100. Your alleged client has waived their status as a creditor when they accepted my tender of payment. They did not adjust their accounting ledger to reflect settlement and closure of the accounts receivable side of the accounting ledger.”

> “I sent the credit department a negotiable instrument in the form of a commercial note draft, as an order to pay. Since she has not returned the instrument to me, she has obviously chosen the latter — an order to pay. A draft may be securitized or monetized by direct deposit in a commercial checking, time, thrift, or savings account under Title 12 USC 1813(l)(1), and when deposited it becomes the equivalent of money.”

> “The collection manager sent a letter saying she does not accept promissory notes. She is, however, precluded by public policy HJR-192 and Title 31 USC 5118(d)(2), and the Consumer Protection Act at 15 USC 1601 and 1693, from demanding payment in any specific coin or currency of the United States. Title 31 USC 5118(d)(2): an obligation governed by gold coin is discharged on payment dollar for dollar, by United States coin or currency that is legal tender at the time of payment.”

> “She has failed to perform her duty as fiduciary trustee of the account. I have done a notarial protest against her and the account for non-acceptance and non-payment, which creates the evidence or presumption of a dishonor. She has knowingly or unknowingly become the debtor and myself the creditor by operation of commercial and administrative law.”

> “Your client is not applying the correct accounting entries under GAAP. She is treating the account as a trade receivable through securitization as an off balance sheet financing technique. Since she has accepted the instrument I tendered, I have a claim or possessory right in the instrument and its proceeds, and any defense and any claim in recoupment, which I shall exercise at my option, if she does not credit my account. The 1099-OID will identify who the principal is, from which capital and interest were taken, who the recipient of the funds are, and who is holding the account in escrow unadjusted.”

> “There are two ways of resolving this matter. Since your client has already accepted my tender of payment and has not returned it: instruct her to credit my account for the sum said in full for settlement and closure. Or instruct her to return the original instrument to me, unendorsed, and I will make an alternative form of payment. Otherwise, I will consider this matter settled and closed.”

THE PRINCIPLES BEHIND IT:

A debt tendered and refused is a debt paid — discharged. Nobody ever gets promissory notes returned because they have already been negotiated. They kept the note and wrote a letter saying they don’t accept promissory notes — but her actions speak louder than words: she accepted it.

The woman in receivables only sees HALF the books. The corporation separates its bookkeeping so they can bring her in with a straight face and no knowledge that the other books exist, and swear the account still has a balance. When the corporation deposited your instrument as a cash item receipt, that went into the OTHER set of books — the set she doesn’t see.

When you send the collection agency the letter, it creates a fiduciary duty for them to go back to the principal and check the off balance sheet liability ledger to determine whether the account has been paid and whether your claim is correct. The collection agent is your best opportunity to settle and close — don’t ignore him. Every debt collector writes “if you have any reason to dispute this debt, let us know.” Do not argue or create a dispute. Give them the facts of your defense. Disputes are not permitted. A counterclaim is not a dispute.

The debt collector can’t resell the receivable once he has had notice — the sale would not have been in good faith. After the collector has seen both sides of the books, continuing would be operating in fraud.

When a new party comes after you, they have no standing — but if you argue, it causes a new controversy. Present your claim showing you are the creditor in the transaction.

PART 8: REGISTRATION IN THE PUBLIC — THE CLAIM THAT CLOSES THE ACCOUNT

The critical teaching: register the instrument in the public record to make it a registered security. The court will not look at any security that is not registered in the public.

The mortgage note is a security and it is never registered. The financial system is dealing in unregistered securities. They cannot take an unregistered mortgage note into court for foreclosure. They never produce the note in a foreclosure because it is evidence of their liability and not cognizable in court. We are the creditor on the mortgage note, so we should register it. As soon as we register the mortgage note, we become the creditor in the foreclosure case with the highest interest.

In the case where the owner showed the judge the registered filing and said: “I am a creditor; I have this lien with the property as collateral. I am the highest-level creditor on the property.” The judge said: “OK, it looks like you have priority.”

The reverse lesson — the man who tendered the note to settle a federal probation and did NOT register it: they settled the private side, but because he could not show standing, they did not settle the public side of the account. You must raise the claim at the appropriate time, or you have not exhausted your administrative remedies. The first court case is actually an appeal from the administrative process — one is not allowed to introduce a new claim in an appeal. Get the data integrity review hearing because you have new evidence to be adjudicated.

The wanted-poster teaching: they cannot take the poster down because there is a silent party in the background that holds the note. You don’t hold it. Someone else holds it, so someone else has a claim. If you want the poster down, settle the claim. They won’t pick you up because they don’t want you to make that claim — your claim would close the account.

Monthly payments are a monthly filing of a notice of interest — proof of continuing interest. If we filed our interest as a creditor in the public record, we would not have to make all those monthly payments. We can choose to be a creditor or a debtor.

The utilities application: the SSN is the trust account that is prepaid. You sign up for your utilities with your prepaid account. Your unrestricted signature with the account name and number is equivalent authority for the utility to keep drawing off your prepaid account to run their corporate business.

No one in America should have a bad credit rating, because they have a prepaid account.

PART 9: RESCISSION — REGULATION Z AND THE UNREGISTERED SECURITY

The Truth-in-Lending Act, Regulation Z, section 226.23, gives the right to rescind any commercial debt contract. Commercial contracts for credit or loan provide 72 hours to rescind, extendable to THREE YEARS from the date you discover you did not have full disclosure.

The regulations say rescission does not apply to residential mortgage transactions. However, once foreclosure has been initiated on a mortgage, one can rescind if they did not disclose the right to rescind at closing. They never give the proper notice at closing. So one could rescind every mortgage contract at foreclosure.

Rescission completely discharges the security agreement — the mortgage deed and the mortgage contract. One can ask for the entire amount of the mortgage note returned in the form of cash.

They should have given you the cash for your note at closing and closed the whole transaction without continuing payments. The house was paid for at closing with your negotiable instrument on one set of books. They didn’t give you credit for the note because you didn’t register the note and show a claim. If you don’t register the note, they will not give you your property back. They can’t give you the note back because they sold it — so they should give all your payments back.

State securities codes give the right to restitution and rescission when an unregistered security is sold. Is the note an unregistered security? When they convert it into a security, it leaves the negotiable-instrument world. After it has gone into the SPV and been securitized, the remedy applies. They have to give you the right to rescission because it is unregistered. So they ledger that you no longer have a liability by giving you the setoff. So they are following the law.

There is case law: people have purchased promissory notes and found out they were unregistered securities. This is money laundering territory.

The flood-plain rescission: one also has the right to rescind if the property is in a flood plain that was not disclosed. Where the high-water mark goes, one is subject to admiralty maritime jurisdiction under Title 33 navigable waters. FEMA defines the flood plain under Title 42 USC 4012(a). It is not possible to take out a loan in a flood plain area without flood insurance — that voids the contract. They never disclosed that the property was in a flood hazard area and there was no flood hazard insurance. That is a material alteration of the original contract.

In the disclosure case: the owner repeatedly asked for disclosure. The court awarded the owner $475,000 in punitive and actual damages from the bank, plus rescission of the contract. The contract was found unconscionable.

PART 10: THE ENEMY OF THE STATE AND THE PREPAID ACCOUNT

In 1933, the citizens became enemies of the state. They were not required to notify enemies of their assets during times of war. They are not required to return enemies’ assets. They are kept on hidden books. That is why they tell you your negotiable instrument is “no good” — under the Trading With the Enemy Act, they cannot allow you to create your own negotiable instruments or use your own assets. All they have done is keep the ledgers separate. The receivables book has not been ledgered against your payables.

God has given us a prepaid account so we never have to go into debt, if we are honorable. We should pay for everything with a promissory note.

All homes are legally abandoned because no one has made their claim for the money that was owed to them. One should have claimed the house at closing because the note paid for it. The bank has no claim. There is a third party that bought the note from the bank and holds an interest in the note.

The originator of the mortgage is the living man. If he is the originator, the SPV becomes the legal holder when the deed is signed. The bank is acting only as SERVICER. The real party in interest is the SPV. No party in the foreclosure is real — so the real parties in interest are not involved in the court.

The first funds transfer: you are the sender of the first funds transfer — the first funds transferor. That makes you the issuer — the drawer and the maker. You are the entitlement holder — the person with securities and entitlement rights on the books of the intermediary. We are entitled to the funds. We are the creditor and we are not bringing this up as a defense. This is why there cannot be a holder in due course — they are taking it subject to the defenses and claims that the drawer and maker, as the originator of the first funds transfer, can bring against the payee. We can trump any claim a holder might have on that instrument.

The claim that the originator and maker can make is setoff — because they sold an unregistered note. If they already repaid the originator on the loan, the whole thing is closed. We got our money back. It stayed in the account because we didn’t claim it — so they assume it has been abandoned. A trustee of abandoned assets invests them to make money. We are paying RENT for the asset we failed to collect. The SPV takes all the payments as profit.

Their real intent: create derivatives to create a security and bond market to finance all commercial and corporate activity. Tying up the land is a profitable byproduct, because nobody understands that they don’t have a claim for it. The beneficial interest holders are the organizations with accounts to buy the mortgage-backed bonds.

The G7 has endorsed the international standards. Now we are into international law with the IASB standards they have adopted. These standards say we have a right to setoff.

THE BOTTOM LINE

Securitization is only illegal for private corporations. The government does everything correctly — they never make a mistake. There is immunity for people who understand the procedure. Only the unlearned are fooled into voluntarily entering into fraudulent contracts. It does not work if you get frustrated and angry at the fraudulent results of your own ignorance.

To prove fraud in the inducement, you would have to prove you didn’t know what they were doing and didn’t have sufficient time to find out. But in order to prove that, you have to learn how to do it right first.

The prepaid trust account. The recoupment counterclaim. The registered claim in the public record. The two sets of books. The creditor on the liability side.

This is the master class. Act like a creditor, not a debtor.

Text “PRIVATE LIFE” to 702-200-4900 and join the Circle — www.skool.com/donkilam/about.

By Don Kilam | DK’s Private Business Circle