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Saturday, November 21, 2009

The Great American Mortgage Scam

Protect Your Home

As foreclosures reach record numbers and the poor are blamed for the sub-prime mortgage fiasco, the real culprit, the mortgage companies and banks escape. Thousands of Americans have been scammed on their mortgages by a very clever securitization technique employed by lenders. Have you been scammed? Here's an easy way to find out:

The easiest way to determine if your "note" was converted to a negotiable instrument by your Lender and sold or traded is to examine your Note and your Deed of Trust. First, your note will have a date approximately at least one week BEFORE you actually sign it.

In the old days, your Note would say, "For value received..."

If you have a Note that the Lender wanted to convert to a negotiable instrument and make 10X the amount of the Note for themselves, your note will start out:

"In return for a loan that I have received, I promise to pay ..."

Of course you have not received an electronic transfer to your account, nor a cashier's check, nor any form of payment at all. The LENDER has completed step one of the fraud. They got you to say you already have a loan when you do not.

Step 2 is to get you to say that you own the home free and clear and can deed it to anyone you want. Of course you don't (or do you?)

Check out Page 3 of your Deed of Trust. Under Borrowers Covenants, if it says:
"The borrower covenants that he/she/they are "lawfully seized of the estate."

There it is. You have told the Lender:

1) That you have already received a loan, and
2) That you own your home free and clear of encumbrances.

Based on that, the Lender slaps an allonge on the back and deposits it in their own bank, which considers it just like a cashiers check or pay order and this fractional banking technique will allow the Lender to create 10X the amount of your note. In a common scam transaction, a 1st mortgage of $324K, once sold or traded, earned the Lender $3.24 million, less $400K to pay the seller and commission. Nice payday!

The Lender has been PAID IN FULL for just your signature on the Note.

Of course they ignore the RELEASE section of the Deed of Trust which says that once PAID IN FULL they must then reconvey the property to the Borrower and release the lien. Instead it is "reconveyed" to the Lender who has already been paid in full (10X). He then sits back and gets paid again over 30 years by YOU, the generous fool that gave him the property in the first place.


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  1. This is incredible. I looked over my mortgage and what you have said is true. I always remember loan documents starting out "For value received". I want blood.

  2. How do they get away with this legally and what can a person do?

  3. What is the answer? My loan documents have the same writing. I'm a month behind and fear foreclosure?

  4. Demand that your lender produce the ORIGINAL NOTE. They won't be able to do so because it has been endorsed on the back when deposited or traded. Without proof that you own them -- you don't owe them.

    You may want to contact an attorney who specializes in real estate and securities and who knows the intricacies of this type of transaction.

  5. Great article. I found the wording. What do you do when you are current on payments and in a non-judicial state like Texas? Do you have to start a lawsuit? One of my loans says I have to go to arbitration. Thanks.

  6. There are many loan modification firms that charge an arm and a leg and have a process that avoids a court filing by submitting paper after paper to the Lender and backing them into a corner. These firms are expensive.

    Some people simply file a RESPA letter with their Lender and demand to see the ORIGINAL note.

    Others may try to take them to court and nullify the contract due to a lack of a meeting of the minds asserting that no contract ever existed.

  7. Candid B -- you are way, way off here.

    First, your suggestion to demand "the ORIGINAL NOTE" can't happen. If they did that the debt would be discharged.

    Second, your 11/24 complete misses the mark.

    The silver bullet is found in UCC 3-501 and the state equivalents.

  8. With all due respect, it is happening all over the country. In fact, just recently a couple in Las Vegas had their two mortgages cancelled and now own their $1.4M home free and clear.

  9. Candid -- Need more details on "it." This isn't new to me, been researching this heavily for the past six months.

    In Las Vegas the popular opinion among realtors is "the note thing" was popular about a year ago but local judges won't let it happen. Yet Vegas is where the Honorable Linda Riegle (bankruptcy court) tore MERS a new one.

    I think you misunderstood. I'm just wondering what was used for "it." UCC 3-501 is the statutory vehicle for demanding the note be exhibited. Read it -- it's an operation of law, changes the rules of the game in the homeowner's favor, then immunizes them from enforcement.

  10. Guys I am doing research and found a company that can help you fix this fraud, when you are done you only owe 33% of market value, and they process all the paperwork.

  11. sorry I just saw your no advertising, which I was not doing, has worked for a few of my friends


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