Articles

Know Your Rights: Mortgage Elimination Schemes

I am a private attorney general and receive inquiries from numerous consumers. Our firm has recently received some inquiries on so-called mortgage elimination or credit elimination schemes. The Credit Card Dispute Process scheme is by a company known as Consumer Guardians, LLC. It is marketed by Alan Aslan Heart, the same person or company, that markets a mortgage elimination scheme. Alan Aslan Heart is associated with a person or entity known as White Eagle Soaring of the Little Shell Pembina Band, a Treaty Tribe of the Ojibwe Nation. Notably, the paperwork outlining the process say that there are no promises not contained in the writing and that the contract says there is no guarantee as to the results.

Typically, the schemes involve payment of a fee to help you obtain the discharge of a mortgage or the elimination of credit card debt by using consumer protection statutes. The Truth In Lending Act is designed to protect consumers. The Act requires certain information be given to consumers. Consumers can sometimes seek rescission if this law is not followed. But rescission does not mean the consumers can keep the money and avoid the lien too. Unfortunately, most, if not all, of these schemes are illegal. They are also premised on an argument that the entire banking system is flawed. This argument has not worked for tax protesters and it will not work for you.

One attorney who made similar arguments represented over 19,000 consumers until he was sanctioned and disbarred for asserting frivolous defenses on behalf of his consumers. See Matter of Andrew F. Capoccia, 712 N.Y.S. 2d 699 (N.Y. App. 2000); Matter of Andrew F. Capoccia, 709 N.Y.S. 2d 640 (N.Y. App. 2000). According to the Better Business Bureau, this same scheme has been used in Ohio and Wisconsin. As part of the scheme, consumers are being asked to transfer their property ownership to a trust and sign a power of attorney.

When they do so, consumers will likely lose their rights. First, it may be difficult to recover the property. Second, the property may lose homestead exemption status for collection purposes when it is most needed. As a practical consideration, consider all of the big business laws that are being passed today such as the so-called Class Action Fairness Act, the Arbitration Fairness Act, and others. If big business saw a loophole, they could get Congress to close it in days.

This is a terrible practice giving misleading legal advice. I can show you the cases where the attorney was disbarred for making these arguments. I challenge scam artists to show you cases which support the effective assertion of these defenses on as wide a basis as the promotional materials suggest. Do not make the mistake of giving your home away based on a so-called mortgage elimination scheme. The U.S. Government is still pursuing the assets of Andrew Capoccia. See U.S. v. Contents in Account No. 059-644190-69, 253 F. Supp. 2d 789 (Vermont 2003). This is years after the alleged perpetrator was disbarred. Mr. Capoccia filed for bankruptcy with something like 19,000 consumers trying to collect their debts. In re: Capoccia, 292 B.R. 796 (Bankr. Vermont 2003).

Consumers should always seek counsel before surrendering their home. Also, consumers who have been contacted regarding mortgage elimination schemes or who have been defrauded by such schemes, should contact a consumer protection attorney. Your attorney should also provide a copy of the complaint to the FTC Credit Practices Division in Washington, DC