Do-It-Yourself Mortgage Cancellation Racket A New Foreclosure Avoidance Technique?

In Atlanta, Georgia, WSB-TV Channel 2 reports:

• A Channel 2 Action News Investigation has uncovered a new scheme homeowners are using to avoid foreclosure. It involves canceling their own mortgage, and some homeowners told Investigative Reporter Jodie Fleischer it’s working. But at least one local official calls it fraud.

• The Internet is flooded with offers promising to help save your house. Susan Weidman started her research after losing her husband to a brain tumor. With mounting bills, she didn’t want to lose her home, too. “I didn’t really set out to think that I could possibly get a free house. I just wanted to stall,” Weidman said. Weidman said she hasn’t paid her mortgage in a year. She received several foreclosure notices but the sale never happened.

• “I’d like to think it was the paperwork I filed all right, because everything I filed was basically with fair warning and asking them questions that they refused to answer,” she said.

• Weidman filed several documents with the Cobb County clerk of court including a document that challenged the mortgage and another that revoked her power of attorney.
  “The way they foreclose,” she said “is basically signing your name to a foreclosure document.”

• But Weidman told Fleischer there was one document in particular that made the difference. She canceled her own mortgage by signing her name for World Savings Bank. “You actually signed this as attorney-in-fact for the CEO of the mortgage company,” Fleischer asked. “That’s right…, for John Stumpf,” replied Weidman. She sent a letter to the bank telling the CEO she was going to sign his name. Because he didn’t respond, she said, that effectively gave her permission to do so.

• But the Cobb Clerk of Court said it’s fraud and a felony. Fleischer found at least 15 different homeowners who have done the same thing in Cobb County. “They’re desperate, they’re reaching for straws and these people tell them they have a straw,” said Cobb County Clerk of Court Jay Stephenson.

• Stephenson said “these people” are the ones teaching homeowners what to file. Fleischer found one advertisement for a seminar held in DeKalb County last year by a group called the Underground Railroad Network. Lateef Kareem-Bey spoke at the group’s Stone Mountain office on behalf of one Gwinnett county couple facing foreclosure. The couple signed for the bank and said their mortgage was fully paid, but still got evicted.

• Stephenson said it won’t be long before desperate homeowners start getting prosecuted for their paperwork.

For more, see 2 Investigates: Homeowner Tricks To Get Out of Paying Mortgage.