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Get out of your mortgage for FREE?!?

By
Real Estate Agent with Century 21 Results Realty GA RE Lic # 282060

Probably not...From Getty Images http://www.daylife.com/source/Getty_Images

But that doesn't mean that people aren't trying it... and it doesn't mean that people aren't getting in trouble for it.

Here is the way it works (and it all sounds so legit...):

  • Mr. and Mrs. Consumer buy a house and get a mortgage from MonsterMegaMortgageCompany (MMMC).
  • MMMC sells their mortgage to Investor Pool #1.
  • Then it is bundled and sold to IP#2... and #3 and #4 over a span of a few years.
  • Mr. & Mrs. Consumer start having problems, and despite everything they are facing foreclosure.
  • To try to get help they contact a "Foreclosure Mitigation" Law Firm that fights the foreclosure by filing a "missing title" lawsuit.
  • The law firm (or other entity) charges an up-front fee (maybe $2000) and then monthly fees (maybe $1000 or $1500)... as well as a contingency fee upon settlement of either 50% of the reduction or 75% or 80% of the value if the mortgage were completely eliminated.
  • After stringing along Mr. & Mrs. Consumer for a few months or longer (collecting fees), they fail to actually prosecute the case.
  • Mr. & Mrs. Consumer lose their home...

According to a few of the sources I looked at, their are no recorded examples of any suit of this type EVER being resolved in the consumer's favor.

The basis of the lawsuit is that if the mortgage holder can't produce the documents from the mortgage, it will be set aside and the consumer will own their property free and clear.  Sounds nice, huh?

Before getting sucked into something like this, here is a little more reading...

Source 1

Source 2

The State of California is going after one of the firms involved in this practice.  I would expect that there are similar cases in other states.

Times are tough...  scamsters know it, too

People being foreclosed on are all over the place.  They are vulnerable to people that approach them to "help."  There are a variety of scams and plans that mostly just revolve around generating a profit for the "helper."

Be careful!  There is help for many home owners that are in trouble... but the easy sounding solutions often aren't what they are cracked up to be.  If it sounds too good to be true, it likely is...

I would love to lose my mortgage, too... but this isn't the way...

 

from LaneBailey.com

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Comments (74)
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Ray Spitler
Keller Williams Realty - Plymouth, MI

I wonder if the homeowner has any recourse against the Law Firm for misleading them? I'm sure they signed a disclosure preventing any kind of recourse against them. Shame on them...

Jul 10, 2009 06:37 AM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Thank you all for the commets.  There are just so many.  I have been reading them as they came in... 

Michael J Perry - And that has to do with the post how?  It was a nice little speech, but I had nothing to do with the post. 

Keith - Went to your link... that would be a scamster...  He is selling seminars on how to cheat people.  Nice. 

Jason Dragon - there is always a friend... got a case citation?  There have been some people that have stalled foreclosure, but none that have gotten rid of their mortgage... including your "friend".

Ray - If they were defrauded, then there isn't a release in the world that owuld stop them from saying so.  One can't sign away the right to report a crime.

Jul 10, 2009 07:12 AM
Anonymous
Keith Kropp

I wouldn't be so quick to dismiss Neil Garfield.  He only recently started offering seminars and they are mostly for attorneys.  He also offers a layman seminar for those who want to tackle this themselves.  You should look more deeply into the site. I'm not sure what state you are in, but Florida is devastated with this foreclosure mess.  Most homeowners are under water, many are hundreds of thousands under water, but do want to save their homes.  If they can affordably use Mr. Garfield's strategies and eventually work out a fair modification, then so much the better.  If they are not intertested in saving their homes they can do a short sale.  Most reputable lawyers are not representing a client will get his home for free.  That would be like winning the lottery.  Not going to happen. 

I have been full time in real estate for 25 years in this market and there does not seem to be an end to what is happening right now.  The housing market is the foundation of this nation's economy.  Until the housing market can be stablized there will probably not be an end to our current economic crisis. 

Jul 10, 2009 07:40 AM
#57
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

I have not had a minute today to read the comments - but

If it weren't so unbelievable most people would think you were telling a joke.

But you are, for the most part, correct.

Your storyline supports my law firm's motto - "FORECLOSURE IS NOT THE SOLUTION".

Jul 10, 2009 10:43 AM
John Alesi
Century 21 Award - Mission Viejo, CA
(Orange County California Real Estate)

Thanks for this post.  I hear advertisements everyday about how "the Obama administration passed laws to help consumers in trouble and if you call _______ Law firm, we'll help lower your mortgage by as much as 60%"

Thanks for revealing the scam

Jul 10, 2009 11:31 AM
Suzanne McLaughlin
Sabinske & Associates, Inc. (Albertville, St. Michael) - Saint Michael, MN
Sabinske & Associates, Realtor

Great blog, Lane...I have actually seen this happen.  If it looks too good to be true, it likely is. 

Jul 10, 2009 02:24 PM
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

I have heard of that legal challenge to foreclosure before - if the mortgage company can't produce the original note, that judges would toss the case out, but I had not heard that that was a tactic being used by scammers or loan mod companies. When I first came across this, it was a homeowner who did not have a lawyer who asked the question, and had the case thrown out. I would like to get more information about this if possible, from the attorneys out there....

Jul 10, 2009 02:56 PM
Mary Corrigan
Progressive Urban Real Estate (PURE) - Cleveland, OH
CDPE, ABR, e-PRO

What is happening hear is delays in the case while the banks come up with the original note-giving folks more time to come up with a solution, always be on the lookout for scams.

Jul 11, 2009 12:30 AM
Anonymous
Beau Ferguson

Wow........thanks for sharing. Amazing how many rotten people are out there to scam someone.

Jul 11, 2009 04:41 AM
#63
Kerry Jenkins
Prime Properties - Crestline, CA

I haven't heard of this scam, but I've heard of demanding that the bank show them the note to forestall losing their home.  I would do that too, to try to buy as much tme as possible to get the bank to work with me, but how can anyone pay that much to a company when it could go towards making their payments?  Unless their payments were 2-3x that amount...

Jul 11, 2009 07:17 AM
Ginger Moore
Wilkinson & Associates Realty - Gastonia, NC

nice blog. thank you for sharing this information. Yes, unfortunately there are always scammers out there.  the bad part is that we all must bear the burden, eventually, if one person defaults.  Things then get higher for the rest of us.

Jul 12, 2009 02:28 AM
Carmella Hustoft
Keller Williams Western Realty - Ferndale, WA
Washington Realtor

This is the exact process that  a family member went through except the scammer was a credit counselling firm that took their money and had wages garnished! 

Jul 13, 2009 06:59 AM
Dan Quinn
The Eric Steart Group of Long & Foster Real Estate - Silver Spring, MD
Dan Quinn

Lane,

Thanks a million for this info.  It seems every time I turn around there is another scam like this surfacing its ugly head.

Jul 13, 2009 07:34 AM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Thank you all for the comments - I still think this is a losing game for the homeowner.  Of course the banks DO deserve a spanking, but in most places the owner is going to get stuck with late fees, past due payments and STILL ending up losing their homes.  Of course, since most will ose the house, it just means they get to score some free housing...  Nice...

Jul 13, 2009 03:30 PM
Sandy McAlpine
RE/MAX EXECUTIVE - Cornelius, NC
Search Lake Norman Homes For Sale - Lake Norman NC

I have also heard of folks asking for the mortgage companies to produce a copy of the note. After being sold so many times, the mortgage company cannot produce it and the mortgagor then tries to say that they do not owe the balance due.

Jul 14, 2009 02:38 AM
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Lane - It's sad that there always seems to  be those that try to take advantage of other people's circumstances.  I have heard some crazy stories about what some homeowners are doing, as well as other people who are trying to get into the real estate market to take advantage of those in distressed situations.

Jul 15, 2009 08:52 AM
Kenneth Young
Uni International LLC - Virginia Beach, VA

Always great to know about new/old scams.   There will always be someone one out there that believes in them...

Jul 16, 2009 02:10 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Thanks. 

Jul 16, 2009 02:58 PM
Mark Velasco
Sharpstone Commercial - Whittier, CA
Top Producing COMMERCIAL Team 30+ years experience

Lane. Thanks for the advice and the warning. These are tough times and people are sometimes out to steal our hard earned money.

Jul 28, 2009 06:14 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Mark - There are always people looking for an easy way to take people's money...

Aug 04, 2009 04:16 AM
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