Do banks create money out of thin air?

Answers:0   |   LastUpdateAt:2012-11-05 14:07:32  

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Rahul
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When you get a home loan, does the bank simply create this money out of thin air? Or did they already have all of that money on their books? I almost went through foreclosure and the customer service lady from the bank made me feel really guilty for trying to back out of money I borrowed from them. But if they simply created that money out of thin air then they have no right to give me a guilt trip over it. Actually, if they created the loan money out of thin air, and I foreclosed on the house, then they would gain possession of the home for free. So why would they even try to make me feel guilty about that? Please source your information on how banks create loan money.
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