Being a real estate practitioner as well as
a borrower on a home mortgage, I was intrigued
when I saw this claim on an advertising flier:
“Legally eliminate your mortgage in 60
days or less!” When I later saw it on an
advertising banner on a web site, I couldn’t
resist clicking the link to see what the scheme
is about. Sure enough, the advertising page
gives you just enough information to make the
claim sound legitimate, then invites you to
call their toll-free telephone number to learn
more.
I won’t even go into the explanation given
on the advertising page other than to say it
is based on a collection of old theories about
how money isn’t really worth anything because
the Federal Reserve is a sham. My point for
present purposes is that the claim that you
can “legally eliminate your mortgage in
60 days or less” is based on the idea that
the lender on your mortgage didn’t actually
lend anything of value, not on whether the document
that was recorded as a result of the loan (in
Arizona, it’s called a deed of trust) is
actually a lien on your house. The only way
to “legally eliminate your mortgage”
is to record a document, properly executed by
the lender, that releases that deed of trust.
I’m baffled by the “60 days or less”
part of the claim. It doesn’t take 60 days
to record a document. I send documents to the
Pima County Recorder’s office almost every
day. The documents are recorded the same day
that they arrive at the Recorder’s office.
It takes about three weeks for the Recorder
to return the documents, but only because after
they are recorded, they are microfilmed before
being returned. I suspect that the “60
days or less” part of the claim has something
to do with how long it takes the promoters of
the scheme to collect their payments for the
information they want to sell you.
When you enter into a real estate loan, you
sign a promissory note, which is the document
that memorializes your promise to repay the
loan, and a deed of trust, which means that
the property serves as collateral for repayment
of the loan. The deed of trust is recorded,
while the promissory note ordinarily is not
recorded. When you fully repay the loan, another
document, called a deed of release, is recorded,
which has the effect of releasing the lien of
the deed of trust. That means you then own the
property “free and clear,” that is,
without the lien of the deed of trust. That
is how you “legally eliminate your mortgage”
(in fifteen to thirty years, not 60 days or
less).
The process I have just described is of course
very familiar to real estate professionals.
The average homeowner, however, probably has
little understanding of the process. My hunch
is that the promoters of the “legally eliminate
your mortgage in 60 days or less” scheme
are somehow trying to take advantage of the
average homeowner’s lack of understanding
about the real estate lending process, perhaps
by simply glossing over the fact that claiming
the bank didn’t really make a loan is not
going to eliminate your mortgage. If we ever
find out how the scheme really works, it will
probably be when news items appear about a law
enforcement investigation of the scheme.
