What is Mortgage Elimination?

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  • Written By: Jim B.
  • Edited By: Melissa Wiley
  • Last Modified Date: 25 August 2019
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Mortgage elimination is a fraudulent practice perpetrated by individuals or companies attempting to convince home buyers that their mortgage loan is not valid and therefore does not have to be paid back. These fraudulent companies, basing their arguments on misrepresented past court rulings, claim that the mortgage loans are illegal. The basic idea behind mortgage elimination is to frustrate mortgage lenders into settling when the process is brought to court. Most courts can spot the scam, though, and take very little time in finding in favor of the mortgage company, at which point the home buyer finds himself in even deeper financial trouble.

It is common during times of financial turmoil for scam artists and thieves to prey upon the frustration of consumers who can't pay their bills. In the beginning of the 21st century, the economic collapse has centered on the real estate industry, with many homes going into foreclosure when the buyers couldn't pay back their mortgage loan. As a result, mortgage elimination has become an increasingly popular scam that fools both innocent people in need and those people simply trying to get around paying off their mortgage.


The basic premise behind mortgage elimination is that the mortgage loan itself is illegal and therefore invalid, meaning that the borrower has no obligation to pay it off. Legal arguments used to make this claim may vary. In the United States, some of these arguments are based on the theory that Federal Reserve Notes, which the lender advances to the borrower in a mortgage agreement, aren't really legal tender. Another claim states that, as no money actually passed from the lender to the borrower in the mortgage loan, the borrower has no reason to pay any money back.

While all of these theories are invalid, the perpetrator of the mortgage elimination scam uses them to convince the home buyer to file paperwork invalidating the mortgage lender's claim on the house. This essentially gives the buyer all of the equity in the property. He then uses this equity to file for a separate loan. Out of this loan, the home buyer then pays off the group perpetrating the scam.

When the original lenders find out about this, he will usually take the home buyer to court. At that point, some representative of the mortgage elimination scammers will attempt to pass off the invalid arguments in front of the court. Ultimately, the hope for the scammers is that the lender will settle out of frustration. In reality, the court will wave off these arguments and the consumer will be on the hook, not only for the mortgage payments, but also for whatever penalties she might have incurred along with court costs.


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