Forensic Loan Audits For Homeowners On Loan Forbearance

A forensic loan audit is an essential tool for a loan modification attorney. They weren’t all created evenly, though. One cannot make a decision just on the basis of price. Before investing in a loan audit, you should be aware of a few crucial elements.

Lender breaches are purportedly present in more than 80% of all mortgages. The possibility that a homeowner will benefit from a loan audit is very high. If a lender violation is discovered, the homeowner will have authority when looking for a loan modification, short sale, or any other type of residential loan workout.

If a homeowner received a mortgage between 2002 and 2008, they might be a good candidate for a residential loan workout. Why? At the time, a lot of lenders provided high-interest loans, refinanced loans, and adjustable-rate mortgages (ARMs). Due to the borrowers’ eventual inability to repay the loans, these loans frequently pose issues for homeowners.

The banks should have made the loans based on something other than the borrowers’ income and ability to repay the debts. Attorneys can work with Forensic Loan Audit Specialists to determine any problems with the homeowner’s loan, if there are any. The ability to sue dishonest lenders and predatory mortgage companies in court and win or negotiate a fair and equitable loan settlement has been given to homeowners.

A forensic loan audit is a thorough, scientific examination of the loan in order to determine whether the lender violated any national, state, or local laws in the servicing of the loan. A loan auditor can perform a thorough and in-depth analysis of the mortgage documentation for a customer to see whether there are any lender breaches connected to the homeowner’s mortgage.

Before choosing whether to ask for a loan audit, every homeowner should be aware of a few essential elements. The following information is a brief list of things every homeowner should be aware of:

• A high-quality loan audit carefully reviews every document in your client’s mortgage agreement.
• A loan audit must be performed forensically or scientifically.
• Read and compare all relevant and applicable mortgage case law with the mortgage documents.
• Your loan audit needs to be in writing, and it should include an analysis of any problems that your customer needs to be made aware of.

There’s a good chance that the lender is making it challenging for a homeowner to alter their loan, whether it’s by not returning calls, providing inconsistent information each time they call, or further delaying the process. However, when a borrower presents the lender with evidence of loan breaches, the lender is frequently more willing to speak with the borrower about a residential loan workout in order to avoid potential litigation.

Every homeowner should exercise caution when requesting a forensic loan audit since some companies lack the knowledge and legal standing required to carry out such audits. Fraudulent foreclosure “rescue” specialists, according to the Federal Trade Commission (“FTC”), use half-truths and outright lies to sell services that promise assistance to struggle homeowners.

As a result, the homeowner must exercise caution and be vigilant for fraud when a forensic loan audit does not involve expert competence. The following are warning signs of a scam that homeowners should be aware of and avoid:

• Ensures that the foreclosure process will be halted automatically. In order to negotiate a loan modification, short sale, or other residential loan workouts, the homeowner may utilize this as leverage;
• Requests that the homeowner refrain from speaking with their lender, lawyer, credit counselor, or housing counselor;
• Encourages the property owner to rent it out in order to eventually buy it back;
• It recommends that the mortgage be paid to the homeowner directly, as opposed to the lender;
• Places excessive pressure on the homeowner to sign paperwork they haven’t had time to look through carefully or don’t understand.

Even if homeowners aren’t looking to modify their mortgages because they can’t pay or because they’ve decided that foreclosure is the best option, it might still be in your best interest to get a forensic loan audit to spot any lender violations.

The homeowner may be able to negotiate a better settlement with the bank and maybe avoid a deficiency judgment when carrying out any form of loan workout or even going through with a foreclosure on the property with the knowledge of loan breaches.

Without sufficient negotiation from an expert in conducting loan workout conversations, the lender can still acquire a judgment for the outstanding balance of the homeowner’s mortgage and pursue collection operations years down the road.

A forensic loan audit may be the key to strengthening a homeowner’s negotiating position with the lender should the homeowner consider a loan modification, face foreclosure, or consider any other serious financial hardship with regard to his or her home if they are struggling to make payments and stay current in an effort to maintain the home.

Suppose a homeowner is completely capable of repaying the mortgage and is aware of the terms of their particular loan and scenario. In that case, they should not utilize this as a means of trying to escape debt. Unless they think the loan is unjust or that the lender may have taken advantage of their predicament by getting them into a loan they weren’t eligible for in the first place, homeowners shouldn’t use this tactic. Homeowners will also find it simpler to understand their financial status as a result. In the end, the homeowner should have a clear understanding of how to proceed after receiving legal advice from a certified specialist and a loan audit.

Conclusion

Despite the fact that a forensic loan audit is only suggested as a last resort in negotiations with your creditors, it will unquestionably make you aware of any violations they may have committed. It might be a big help in getting your creditors to the negotiating table if it can be proven.

However, if you have successfully gotten a loan forbearance, you should probably wait till the given period is over before conducting a forensic loan audit.