View From the Bushes

Some of the people I work with at my "real" job have come across this great idea called "Mortgage Cancellation". There are apparently several Companies who for a small fee (somewhere between 2000 and 7000 dollars up front) will point out the immorality of the traditional mortgage. The banks shocked to realize that the are not really lending to you but borrowing from you. Will promptly fall over play dead. Annual your mortgage and that pesky 250k you used to owe on your home? No more. You'll own it free clear and without the tiniest amount of debt. Okay they do charge you 15% of the annulled mortgage, but they've figured a way around that as well.

So continuing with the example of the 250k house you would owe 37.5k after the mortgage has been annulled. But you also have 250k asset which is entirely in you name (seems a little contradictory but it gets worse) so you use your house to get a home equity loan (they recommend for 80%) so you would then have another loan in this case for 200k you would use 37.5k of that to pay of the original debt and then you would cancel this mortgage as well. (Apparently these lenders are really slow learners). This leaves you with another 15% liability plus the $4000 you've spent up front for both cancellations. so deduct another 34k leaving you 138.5k which you can do with as you please. So under this great system you get a 250k house for free, plus somewhere in there someone gives you an additional 138,000 dollars just for being you.

Sounds to good to be true? You're probably thinking well why don't I do this forever until I have all the money in the great state of Utah. Sorry there is a cap you can only do it twice per house. So as you can see it's not to good to be true it's a perfectly foolproof ethical way of scamming someone (they never say who) of a third of a million dollars. My guess is that the scamee in this particular scenario is you. But who knows, all of my co-workers look at me in disbelief when I suggest that this can't possibly work like they say it does. When I mention the collapse of the world economy they just give me a blank look and tell me I'll be sorry when they own 10 houses and have a million dollars in the bank.

Carpe Diem Quam Minimum Credula Postero
Ross