A mortgage loan audit, also known as a forensic audit, examines the terms of your mortgage to determine whether the loan is legitimate. According to forensic auditors, if there is a problem with the mortgage, you can compel a loan modification in your favor or cancel the loan altogether. The ease of this process depends on a number of variables, including the availability of an auditor and her workload. An audit often takes up to two weeks.
A federally licensed counselor can give you information to prevent foreclosure if you’re looking for a mortgage loan audit to discuss improved payment conditions with your lender. The HUD agent can tell you if you’re eligible for lower monthly payments under the Homeowner Affordability and Stability Plan. The same information is provided via foreclosure prevention counseling, which is free, as it is by a for-profit organization or auditor.
Filing a lawsuit
Advocates for mortgage loan audits claim that the majority of mortgages have a legal problem that offers the homeowner leverage to negotiate a lower interest rate. However, Lisa Madigan, the attorney general of Illinois, asserted in 2012 that “An audit can virtually never be utilized to negotiate a lower rate with your lender.” Although numerous mistakes in mortgages have been discovered, a homeowner seeking to hold the lender accountable through a formal, enforceable legal process must go through the court system, which can be costly.
To acquire a forensic audit, the Federal Trade Commission strongly advises against engaging private forensic mortgage loan auditors. An audit of your mortgage loans will cost you between $200 and $300. In around one to two weeks, your mortgage will be examined. According to the FTC, you will be advised that the report will help you lower your mortgage payment, avoid foreclosure, modify your mortgage, or cancel your loan if the auditors determine that the lender has not followed mortgage lending rules.
According to the FTC, fraudulent foreclosure “rescue” specialists “offer services that promise aid to homeowners in crisis while using half-truths and outright lies.” Mortgage loan audits are what Madigan refers to as a “new form of mortgage rescue fraud.” Beware of scammers if you’re looking for someone to check your mortgage for mistakes in the hopes that you might be able to get lower payments or perhaps have your loan canceled. Madigan suggests contacting a HUD agent. Another potential source of assistance is a good attorney, ideally one with knowledge of mortgages and real estate sales. Even if you discover errors in your mortgage documentation, you must sue the lender to ensure that you will receive compensation.
The Distinction Between a Surety and a Co-Signer
Simply put, a nominee loan is one where a third party assumes the role of the actual borrower. A nominee loan by itself is not immoral or illegal. However, the nominee loan arrangement can frequently be utilized to trick a lender into issuing a loan that it otherwise would not. These nominee loans are dishonest and may result in criminal charges.
A nominee loan is initiated by a third party who has no intention of keeping the loan funds or making loan payments. She submits an application for a loan, allowing the bank to lend her the money depending on her credit and income. She sends the money to the actual borrower after the loan is granted. The nominee will then pay the lender on behalf of the actual borrower, who pays the installments either way.
Loans and straw purchasers
Mortgage fraud schemes commonly incorporate nominee loans. A buyer with poor credit finds a replacement with good credit. Then, the person with good credit purchases the property, allowing the actual buyer to occupy it and handle the payments. The loan ultimately defaults when the unqualified buyer cannot make payments, albeit the qualifying borrower is actually not making the installments. Because they enable the scheme’s perpetrator to obtain favorable loans by using someone else’s good credit, nominee loans are also a component of other mortgage fraud schemes.
Insiders in banks
Legally speaking, nominee loans arranged via a bank insider are particularly delicate. Insiders of the bank, such as board members or senior management, typically have access to capital and can borrow money in favorable conditions. Federal regulators are significantly more likely to consider a nominee loan to be fraudulent when they act as the straw man in it. Sometimes even the best of intentions won’t be enough to shield an insider from punishment.
Co-Signer versus Nominee
You don’t have to hide behind a third party if you genuinely need assistance with loan eligibility. Nominee loans are typically in a gray area, even though they are theoretically lawful if you declare what you’re doing and don’t intend to mislead. However, such an arrangement is permissible if you have the person who would have been your nominee co-sign your loan. With a co-signed loan, you can still access funding by using that person’s resources, but you are also held accountable for the debt. This is not only entirely legal but will also help your credit if you can properly repay the loan.
A forensic auditor must complete specialized training in forensic accounting, accounting law, interviewing skills, data analysis, and, most significantly, training in the proper processes for gathering evidence. A forensic audit or review is more thorough and detailed than a statutory audit.
For its clients, Mortgage Audit Online conducts forensic audits and reviews.
A forensic audit or review has been developed to address the void created by audit firms that focus largely on controls. A forensic audit or review examines how an incident happens, what caused it, and how to fix it. It is an effective method for pinpointing precisely what is causing recurring problems in an organization.
Our forensic audits and reviews’ success relies heavily on excellent interviewing and listening abilities. Our work is meticulous. It delves deeply into a subject to offer solutions that are not immediately apparent. We will give you answers to the Who, What, Why, How, and When questions.
We can assist you in investigating any claim of fraud, bribery, or corruption, whether it relates to an internal problem, a contract review, a supplier agreement, a partnership with a joint venture partner, or any other situation.
For information on foreclosure defense call us at (877) 399 2995. We offer litigation document review support, mortgage audit reports, securitization audit reports, affidavit of expert witness notarized, and more.