beware of mortgage elimination schemes

The Better Business Bureau is alerting homeowners and lenders to a mortgage elimination scheme operating in the Carolinas and nationwide.Dorean Group, headquartered in suburban Oakland, Calif., uses independent agents to promote its program. Two such agents are Julian Professional Services (www.terminatedebts.org) and Capital Creation Resource (www.ccrsolution.com).

The basic scheme is:After paying a fee between $1,500-$3,000, the homeowner agrees to place the title to his or her home in a family trust and then present the lender a document that contains 40-50 "legal" challenges to the loan. These challenges describe "violations" of federal laws committed by the lender. The lender is instructed to respond with proof of the validity of the loan. When the lender fails to respond, a power of attorney is filed which gives the trustees authority to act on behalf of the lender. Using the power of attorney, a "Discharge of Mortgage" is filed certifying that the loan has been fully paid. The next step is to apply for refinancing on the home. Once obtained, the homeowner, Dorean Group, and the agent divide the funds. This new loan is then "eliminated" using the same technique.

This scheme was uncovered first by the Better Business Bureau of Cleveland, Ohio. Their attempts to contact Dorean Group have revealed that the address used on trusts and other paperwork is a UPS Store mailbox. No record of the company was found with the California Secretary of State and there was no telephone number for the company listed with information assistance.

Better Business Bureaus in other cities are finding similar activity. Further information about the schemes and the pitch they use with homeowners can be found on the websites noted above. The Julian Professional Services website also offers to provide information on eliminating auto loans.The BBB believes that homeowners who sign onto Dorean's program likely face several potential legal problems - default on their original mortgage, foreclosure, difficulty selling the home due to the newly established trust and the title issues it may create, potential liability for failure to pay any additional loans procured by the trust, and a possibility of being an accessory to criminal activity. They also lose the thousands of dollars paid as an upfront fee.It is not likely that a mortgage would actually be released without the active approval of the lender. However, the lender could encounter a serious customer service or collection problem.

The BBB alerted lenders holding the original mortgages to the Dorean Group's scheme. Representatives of the lenders cannot go on record due to their ongoing investigations and obligations of confidentiality to the homeowners. They confirmed, however, that the paperwork is suspicious at best and fraudulent at worst. The claims of the Dorean Group and their agents on several websites echo those of other "mortgage elimination" schemes. Most create documents that attempt to release mortgages and then take out new loans on the properties in order to pay perpetrators. These companies often proclaim the entire U.S. banking system is flawed and use these claims to persuade homeowners that mortgage elimination is legal and ethical. The Better Business Bureau cautions consumers to be wary of offers from any company offering to eliminate your mortgage for an advance fee. Homeowners should consult a local attorney before relinquishing their homes to a trust and agreeing to participate in these programs.