Banks, mortgage companies, and other lenders offer plenty of legitimate ways to eliminate a mortgage. You can borrow less, refinance for a shorter-term loan at a lower interest rate, make payments every two weeks rather than every month, pay a little extra each month toward the principle, or sell the property.

Now, there's an even better way. Dozens of companies promise to help homeowners completely eliminate their 30-year mortgages in a matter of months for a flat fee of only a few thousand dollars up front!

What a deal! For three thousand bucks or so, all you have to do is kick back in your lounge chair twiddling your thumbs, and in less than a year, you can own your home free and clear, even if you're facing foreclosure! Even better, you may qualify to cash out tens of thousands of dollars in equity!

Here's how a typical mortgage elimination scam works:

First, the mortgage eliminators (a.k.a. con artists) post ads on websites, in Internet pop ups, in classifieds, and wherever else they can advertise offering mortgage elimination. Sometimes this is advertised as debt elimination, because the scheme can purportedly erase the balance on car loans, credit cards, and other debts.

The next step is to sell the theory that mortgage elimination is perfectly legal and it works. This is the fun part. Con artists have concocted all sorts of creative arguments to prove the legitimacy of mortgage elimination. According to one argument, banks don't really loan their money.

They loan money they borrowed, and if you trace that money back to its source, it's money that the government printed, so it has no real value -- it's just paper and ink. As the borrower, you actually generated the money, because the government had to print more money to cover your loan. In essence, the bank made money off of your signature, so the mortgage note is meaningless, and you don't owe the money. In fact, the bank owes you money!

They toss a few extras into the argument to make it sound more convincing, often quoting politicians and Federal Reserve documents out of context to prove their point. They are also careful to point out that banks, mortgage companies, and the FBI will tell you that mortgage elimination is a scam, because the establishment is so afraid that if more people knew the truth, the big bad banks would no longer be able to cheat people out of their money.

Assuming you buy into the argument, you send three or four or five thousand dollars to the mortgage eliminator who promises to guide you through the process and represent you in court. With some con artists, that's the end of it. They pocket the money they receive up front, and then you never hear from them again.

Other mortgage eliminators take the scam even further. They advise the homeowner to march down to the county clerk's office and file a form stating that the original loan has been released; sometimes this is called a discharge of debt. Of course, the mortgage remains in place and the homeowner still owes the money to the bank, but if the county clerk records the discharge of debt, the deed makes it appear as though the homeowner owns the property free and clear.

Now that the homeowner appears to own the home free and clear, the homeowner applies for one or more additional loans on the property, with the generous assistance of the mortgage eliminator, of course. When the loan or loans are approved, the mortgage eliminator and the homeowner split the proceeds, often with the mortgage eliminator walking away with the lion's share.

Eventually, the county clerk, the bank that made the original loan, or the banks that made the subsequent loans spot the scam and confront the homeowner. By this time, the mortgage eliminator is long gone, leaving the homeowner with one or more unpaid mortgages, a legal morass, and possible criminal charges for conspiracy to commit fraud.

Mortgage elimination schemes are designed to hook susceptible homeowners, and they resonate most with the most vulnerable of them -- homeowners who are facing bankruptcy or foreclosure. What these homeowners should do when facing foreclosure is to immediately contact the lender and ask what options are available. The lender may be willing to restructure the payments to make them more affordable or suggest other legitimate solutions to the problem. In almost ninety percent of foreclosures, homeowners can benefit most by selling the property and paying off the balance of the mortgage in order to salvage their credit and start fresh.

Instead, distressed homeowners commonly look for a more tempting solution and end up falling for deals that really are too good to be true. They pay money they already cannot afford to a con artist, they bury themselves deeper in debt, and they create conditions that make it even more likely they will lose their homes in foreclosure.

As real estate professionals, we're the first line of defense against all forms of real estate fraud, including mortgage elimination schemes. We need to educate ourselves in order to protect our clients and our industry against the persistent attacks and ever-changing tactics of real estate con artists. Only by becoming more vigilant and proactive, can we hope to gain the upper hand over those who threaten our livelihoods.

RALPH R. ROBERTS BIO

For more than a quarter century, Ralph R. Roberts has helped thousands of consumers realize the dream of homeownership. Dubbed by Time Magazine