The Mortgage Elimination "Scam"
You've seen the emails:
"Legally eliminate your mortgage"
Can this possibly be true? Well, I've read the claims and researched the law and here's what I came up with.
The Claim
The claim is that you can legally eliminate your mortgage based on an accounting loophole that goes something like this...
"If the lender who funded your loan used borrowed money to fund your loan, then the loan is not valid. And, since the loan is not valid, the security (mortgage or deed of trust) is not valid either. All you do is simply march into court and ask a judge to void your mortgage lien, and you don't have to pay it back."
Now, without going into the legal issues, a common sense approach would tell you that the entire premise of this argument is patently absurd. Think about it... most lenders use borrowed money to fund loans, that's the nature of the business.
So, if these "mortgage elimination" promoters are correct, then millions of mortgages would be void. The entire economy would collapse. This sounds vaguely familiar to the "tax protestor" scam where people claimed that they didn't owe income tax because the government did not have the constitutional authority to tax them. More on that later...
