Mortgage elimination is a type of
mortgage fraud
Mortgage fraud refers to an intentional misstatement, misrepresentation, or omission of information relied upon by an underwriter or lender to fund, purchase, or insure a loan secured by real property.
Criminal offenses may be prosecuted in eith ...
in the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. In this
scam
A scam, or a confidence trick, is an attempt to defraud a person or group after first gaining their Trust (emotion), trust. Confidence tricks exploit victims using a combination of the victim's credulity, naivety, compassion, vanity, confidence ...
, the promoter first convinces a
mortgage
A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners t ...
holder that the debt that has been contracted is invalid or legally unenforceable, usually due to a combination of alleged technicalities in the
note
Note, notes, or NOTE may refer to:
Music and entertainment
* Musical note, a pitched sound (or a symbol for a sound) in music
* ''Notes'' (album), a 1987 album by Paul Bley and Paul Motian
* ''Notes'', a common (yet unofficial) shortened versi ...
,
deed of trust, or other loan documentation signed; the promoters often link their rationale for debt elimination to illegality of certain lending practices, the
Federal Reserve
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...
, and the monetary system of the United States in general. Through a series of illegal maneuvers involving the creation of a trust, a demand letter, and a false re-conveyance of title, the promoter and the original mortgage holder concert to create the appearance of a title free of liens and encumbrances so that another loan may be taken out on the property.
The United States
FBI
The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and Federal law enforcement in the United States, its principal federal law enforcement ag ...
has put out specific warnings regarding this kind of scam.
As of 2006, the Dorean Group was a high-profile promoter of this type of scam. A number of people, described as the "principals with the Dorean Group", were convicted on multiple counts of fraud in California in 2007.
See also
*
Foreclosure rescue scheme
A foreclosure rescue scheme is a scam that targets those whose house is facing potential foreclosure. The scheme preys on desperate homeowners whose mortgages are in default by offering to prevent the foreclosure. There are various ways in which ...
*
Rodolphus Allen Family Private Trust
The Rodolphus Allen Family Private Trust is a group, which purports to be a property trust, operating in Ireland. While supporters of the group's methods have stated that it can exploit loopholes in mortgage documents to prevent the takeover of at ...
, a "trust" which purported to prevent repossession of at-risk properties in Ireland
References
Mortgage
Finance fraud
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