Forensic Loan Audit: Worth its weight in Gold

The numbers never lie and depending on which source you sight the numbers is between 70%-90% of all residential loans since 2003 contain some sort of fraud or predatory lending. Even on the low end the numbers are staggering considering millions of mortgages have been funded and sold since then. What exactly does fraud or predatory lending mean to a homeowner? The reality is that because the lending industry was what I like to call the Wild West, big banks were just pumping loans into the system at all costs. Then packaging and selling those loans to investors and hedge funds overseas as an income stream. Little did these banks realize that the market would tank and they would be under such scrutiny by the general public.

With millions of homeowners now faced with foreclosure the truth must be exposed on how careless banks have been with funding and selling mortgage backed securities and while banks continue to get bailed out and earn record profits it is always the little person that takes it on the chin. The first thing homeowners should do if foreclosed on by a bank is get educated on what their legal rights are and what remedies they may have against the bank.

Chances are the bank will try and foreclose as fast as they can because they know based on the percentages they have flaws in the majority of all loans. These flaws can be as small as being off one dollar on the truth in lending or good faith statements all the way up to blatant fraud by changing income numbers to appraisal numbers all to get the deal closed. In addition to this you need to make sure the plaintiff claiming to have the right to foreclose on your home truly does have the ability to do so. The second step in foreclosure defense is to retain a great litigating attorney who specializes in foreclosure defense.

The way to see all the small and large issues contained in your loan is by conducting a forensic loan audit. This is where a company will examine in depth all your closing documents, loan documents, income statement and tax returns to establish and confirm that the broker, bank and servicers did everything correct when processing, funding and selling your loan. This will take about 5-30 days to complete and will give you and your attorney all the ammunition you will need to aggressively negotiate with your lender. Only a trained foreclosure defense attorney will have a very clear understanding of how to use this information to your advantage.

A forensic loan audit typically costs about $300-$1500 depending who is doing it. It is critical to make sure that the person or company is a certified licensed individual. The reason why this is so important is because when your attorney goes to use the evidence found by the audit the company that produced the audit will be under fire by the bank and to say that they are certified to perform these audits validates your claim that much more. If you attorney does not use a forensic loan audit to defense your case then immediately find another attorney.

Filed Under: Foreclosure • Loan Modification • Predatory Lending • Programs & Tactics • Who Can Help with Foreclosure