Owner Finance

So, I have been studying living without a social security number lately.  When I mention this in conversation, one of the most common questions that come up is this:

Q:  How can you get a loan to buy a car or a house without using a SSN?

At first I was stumped by this question.  You see, a part of my pursuit of happiness is to own property.

How can I buy more property in the future without using the financial system that “requires” the use of a SSN?

I have found two answers to this question so far, please add others that you have learned.

Answer 1:  Save your money until you can buy it.  Simple enough.  However, saving enough money to buy a house at the current highly inflated prices would not really be practical.  This answer does not fully satisfy my needs.

Answer 2:  Owner finance.  This struck me after a couple of months of contemplation.  The wording of the question, ” How can you get a loan to buy a car or a house without using a SSN?” leads you to think about “getting a loan”.  But, “getting a loan” is not the real goal is it?  The real goal is gaining possession of a house or car.  So let’s change the question to, “How can you buy a car or house without using a SSN?”  Let’s walk through this shall we:

Step 1:  Choose a car that you really want.

Step 2:  Negotiate a price with the current owner of the car.

Step 3:  Prepare a simple 2 party contract defining terms for the transaction between buyer and seller.  This could include optional interest charges, remedies or other free and transparent agreements.

The biggest hurdle here is, to get someone to accept your promise to pay, you are going to have to work to sell yourself, right?

Let’s compare this to how things worked last year.    In the bankers credit system:

1.  the seller doesn’t even have to meet the buyer, he just looks at a credit report, the buyer fills out some paper work,

2.  the buyer signs a debt instrument.

3.  a bank, by charter, creates money out of thin air, forwards it to the seller in your name.

The outcome of this 3 party transaction includes:

1.  The buyer gets to stand in line at the DMV, increase his property tax on property he does not own yet, and drives a nice car, with a monthly payment for the next few years.

2.  The seller gets freshly minted money that he trusts other merchants will accept towards his debts.  He also, never has to worry about the car coming back to him at a later date.  He washes his hands of the property immediately.

3.  The bank, who entered the transaction with nothing accept a charter to counterfeit money,  gets a new stable income stream of REAL money from you, plus usury fees.  Money that you most likely gained in fair trade for your time and talents.  So let me review.  Due to the fractional reserve banking system used in the US today, the bank risks nothing.  It simply uses its government charter to create debt based money out of thin air and trades this illusion for a signature of debt from the buyer.  As the debt is paid off, the money paid into principle dissolves back into thin air.  In the mean time the bank gets to gain the profits of the interest payments on money it never really had!

Five years down the road:

1.  You finally make the last payment just when your car is worn out and needs to be replaced soon.

2.  You start the system all over again.

Now back to the 2 party scenario:

1.  By removing the bank from the equation,

The seller gets the profit from interest in exchange for his risk in trusting the buyer.

The seller maintains title of the property until the contract is completed, and can legally repossess the property should the buyer default or otherwise is unable to fulfill the contract.  This of course is more work for the merchant, but he is well rewarded for this by keeping all interest moneys.

2.  The buyer gets to lower his total costs by eliminating the fees and other bank charges.

3.  Both the buyer and seller or obligated to get to know each other better.

I will say this 100 times.  The internet has changed everything.  Anyone who beleives we can ever “get the credit flowing again” is living in a world that no longer exists.  Our times are similar to the 14th century when Western European society had to come to grips with the fact that the world was round.  Transparency is exposing all the secrets of the old world.  We must have courage to embrace the responsibility of living in a free society.  The second American revolution has begun.