I recently read about a couple in my town who is about to lose their home to foreclosure, despite having significant equity in the home. The problem? Several years ago, they fell prey to a “mortgage elimination” scam. Having never heard the term, I did some research and found that several ostensibly legitimate companies attempt to attract people—via internet ads and the like—to participate in what they term a “mortgage elimination” procedure. Although several different schemes exist, the most basic scam is one in which the company offers to litigate the validity of the existing mortgage in court, utilizing theories about the Federal Reserve’s “phantom money” and the actual value of currency, etc. It’s all smoke and mirrors. What typically happens is that the company entices the homeowner to transfer the title to the home to the company, so that the company, as owner, can litigate the validity of the mortgage. Once the title has passed, however, the company’s representative quickly disappears and the homeowner is left with a mortgage on a home he or she no longer owns. The Better Business Bureau has issued an alert on its website, outlining the scam and steps consumers can take to avoid such scams. Here is the Better Business Bureau’s outline of a variation on the scam, which involves placing ownership of the home into an irrevocable trust:
After paying a $3,000 fee, the homeowner agrees to place the title to their home in a family trust, then present the lender a document that contains 40-50 “legal” challenges to the loan. Dubbed the “CPA Report”, this document outlines 40-50 claimed “violations” of federal laws committed by the lender. The lender must respond with proof of the validity of the loan. When the lender fails to respond, a power of attorney is filed which gives the trustees authority to act on behalf of the lender. Using the power of attorney, a “Discharge of Mortgage” is filed certifying that the loan has been fully paid. The next step is to apply for refinancing on the home. Once obtained, the homeowner, their [ ]agent and [ ] group divide the funds. This new loan is then “eliminated” using the same technique.
The BBB believes that homeowners who sign onto [such] programs likely face several potentially serious legal problems – default on their original mortgage, foreclosure, difficulty selling the home due to the irrevocable trust and the title issues it creates, potential liability for failure to pay any additional loans procured by the trust, and a possibility of being an accessory to criminal activity.
The bottom line: if something sounds too good to be true, it probably is. Always check with an attorney or title company before making ANY transfers of real estate. Even better, fully investigate any company that attempts to part you from ownership of your home.
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It WAS all he had to say about it!
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{ 4 comments… read them below or add one }
Along the same idea with this article, I hate to see those signs at our local intersections that claim “Mortgage Apprentice Needed” and “We buy homes” and “Refinance Now”. If I needed mortgage help, I cannot imagine picking a company from a tiny sign on the side of the road.
True enough, it’s amazing how many folks try to get something for nothing. From active cheating and stealing to complaining to the manager and getting a discount on whatever.
I have such an aversion to this type of behavior that I can’t hardly even tell the wait staff when food is cooked incorrectly, etc. I don’t want to be perceived as one of ‘them’.
You know, scam artists have been around forever, and they wouldn’t be so successful if we weren’t so greedy as a society.
Yes, I know that some do it out of desperation and stupidity, or because they really get scammed and would otherwise be honest.
But this particular scam is new to me.
This is crazy and anybody that fell victim to such an outrageous situation such as this one deserves to loose their house! Babs nailed it on the head in the last paragraph by stating “if it sounds too good to be true, it probably is”. Anybody that would sign the deed to their house over to somebody else with an outlandish claim such as the one presented, has no business being a homeowner to begin with.
Like Nemisis said, their are too many greedy people in this country that want something for nothing. Although I hardly think sending undercooked food back compares to anything of this nature, I do agree with the main jist of your statement.
JoseCuervo,
You would be surprised how many people fall prey to scams like this; it’s along the same lines as the “debt consolidation” agencies that will “work with your credit companies” to get you smaller payments….and will charge you a hefty monthly fee for this “service”. It is a shame, really.