Monday, July 16, 2012

What Is A Forensic Loan Audit?

Posted By Darlene Matthews

What is a
forensic loan audit?

Despite all the government and media hype, voluntary loan modifications occur only about 8% of the time. That number increases 4x if there is at least the threat of litigation or bankruptcy. 

 Your chances of obtaining a substantial loan modification will be greatly improved if the lender has violated the law…but how will you ever know? 

A forensic audit can help you gain negotiating leverage on your behalf by finding violations of the law and a foreclosure relief company or real estate agent is unqualified to provide you with any of this legal insight.

At its heart, a forensic loan audit is a process that breaks down and analyzes a set of loan documents to determine if all parties completed proper procedures and complied with regulations during the origination of the loan.

The federal statutes determine which federal requirements need to be met by the lender in issuing the loan. These include mandatory disclosures, how and when such disclosures are made, limits on annual percentage rate, and a number of other requirements.

Forensic loan audits also analyze a loan to determine if it meets state and local requirements. Every state has some form of lending regulation.

 Some states choose to implement statutes that have language almost identical to that of the federal statutes, while others go well beyond the federal statutes and put even more restrictions on the lending industry.

States also may create their own causes of action for additional requirements.

The #1 goal of the mortgage audit is to determine whether there were violations of state and federal law.
If these violations are found, then the borrower may be eligible for complete relief of the predatory loan or a very favorable loan modification. Complete relief of the predatory mortgage.

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