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Beware of the Latest Foreclosure Rescue Scam--"Mortgage Elimination"

Mortgage Fraud Examiners, the investigative firm who warned the public about the
“criminal loan modification trap” and “useless” software audits, is now warning
the public of this latest scam—“Mortgage Elimination”
Ashburn, VA, April 13, 2010 -- Actually, this scam is not new; the last time it
was prevalent was back in the late 1980s and early 1990s when many Midwestern fa
rmers were losing their family farms. Hucksters flooded the Corn Belt promoting
their openly brainless schemes managing to convince farmers that they weren’t re
quired under the law to repay their bank loans. These same nonsensical theories
have resurfaced today in what is known as “Mortgage Elimination.”
Mortgage Fraud Examiners CEO Storm Bradford explains: “The previous scams we’ve
exposed dealt mainly with companies that market “useless” software audits, and c
ompanies charging fees for a loan modification when the homeowner can go to HUD
or non-profit organizations and get one for free. This scheme literally instruct
s homeowners on how to commit federal and state crimes.”
“Swindlers of the “Re-conveyance By Administrative Process” scam, as it’s known,
advise homeowners that financial institutions are forced to cancel mortgages an
d/or deeds of trust, without payment on secured promissory notes because alleged
ly they never lent money to the borrower for the purchase of their home. Accordi
ng to them, this makes most mortgages unenforceable against their so-called “pro
prietary administrative procedure.”
“Why would anyone believe such idiocy when obviously the bank writes a check for
the purchase of a home, or writes the homeowner a check for a cash-out refinanc
e, because these swindlers literally change the content of legal definitions, st
atutes, and court cases; cite various discredited legal theories, quote from out
-of-context Federal Reserve press releases, and intermingle bogus legal terminol
ogy, to scam thousands of dollars out of unsuspecting homeowners who are not awa
re of the fact this "vapor money" theory has been squarely addressed and reject
ed by courts throughout the country for over twenty-five years.
“Homeowners in foreclosure are simply desperate for a solution, and that’s what
the scammers count on. The sad part is the desperate homeowner and his family en
d up in even more desperate straits. They end up paying thousands of dollars for
legal babble that gets them nothing, except a possible criminal conviction in t
he end.”
There are several variations of the scam, but basically this is how it works:
1. Owner/borrower executes a substitution of trustee for the deed of trust aga
inst his or her property (which, of course, the owner/borrower has no authority
to do because of its non revocable character). Substitution of trustee is recor
2. Substituted trustee executes and records a release (or reconveyance) of the
deed of trust, or
3. Substituted trustee records a notice of sale pursuant to deed of trust, fol
lowed by a trustee s deed in favor of a third party (or trust). It appears the
trustee s deed does not follow a legitimate foreclosure sale, and the third part
y is a strawman or otherwise holds the title in trust for the former owner/bor
4. Later, property is refinanced (or possibly sold) with new title insurance b
eing issued to include coverage against the supposedly released or foreclosed de
ed of trust.
In essence, the homeowner files a forged reconveyance on a property, making it a
ppear that the property is owned free and clear. The homeowner encumbers the pro
perty with a new loan and runs off with the new loan proceeds. http://www.fincen
"There really are many legal options available to homeowners facing foreclosure,
" Bradford concludes. “However, the only process that really works is to find ev
idence of tortuous misconduct and/or violations of state and federal consumer pr
otection acts, establishing contract defenses to force the lender to deal on you
r terms not theirs. Every mortgage transaction has unique facts, every claim has
different applicable law, and only a legal specialist is going to find the answ
Mortgage Fraud Examiners, Phone: 800.540.EXAM (3926), http://www.mortgagefraudex
Contact :
Storm Bradford
Mortgage Fraud Examiners
PO Box 1332
Ashburn, Virginia 20146
1-800 540--EXAM