Your attorney will discuss your specific financial crisis and the approach used to prepare a financial affidavit in your case with you before beginning the preparation of your financial affidavit.
Gathering the following pertinent documents is a good place to start:
These documents may be statements, bills, or notes for the liabilities area.
The following action is to determine your monthly expenses. You should be as accurate as you can with your calculations.
Finally, hand over your calculations and pertinent papers to your attorney, who will arrange the information in a manner that is acceptable to the court where your case is currently being heard.
Of course, you should ask the attorney you are dealing with any questions you have as you are getting ready.
What does a financial affidavit serve?
An explanation of a party’s financial situation should be given to the court in a financial affidavit. The court would be unable to issue financial or property distribution orders without this information. A well-written and accurate financial affidavit can support a party’s credibility in the eyes of the court on a secondary level.
The Value Of Mortgage Accounting Fundamentals
As most mortgage experts are already aware, accounting knowledge is necessary for successfully managing a mortgage business. The methods the outside world uses to evaluate your accomplishments are the books and records kept at your company. As a business owner, you must be able to interpret financial data, understand where it comes from, and understand how to maintain a successful course.
Accretion vs Cash
Go to the next section if your books are kept on an accrual basis. Find out for sure if you are unsure. I strongly advise switching to an accrual approach if you are currently accounting on a cash basis.
Simply put, cash accounting is the act of documenting transactions when money is exchanged. You should record your bill payment on the day you write the cheque. The day you record the revenue is the day you make the deposit. Although it is simpler to do business accounting this way, it is hard for a mortgage firm to match revenues and expenses using this method. It would help if you thought about switching from cash to accrual accounting to be more efficient.
The largest monthly outlay at the majority of mortgage banks is made up of commissions that are paid the month after the closing of the loans. Most mortgage banks make money at two critical points: funding, when fees and discount points are collected, and loan sale. Although revenue from sales and funding can occur in the same month, loans are typically sold the month after they are funded.
Earnings will probably be harmed in the first month after switching to accrual accounting. Suppose your business generates most of its revenue when loan funds and you pay loan officers the following month. In that case, all other things being equal, your transition month will display significantly lower earnings.
To offset the increased costs that are being transferred to the prior month, you should increase the fair market value of your warehouse loans. It would be a good idea to have your financials reviewed by a third party, such as your accountant or auditor, before releasing them in the first month. The effects of switching to accrual accounting will be evident after the first month of operation; therefore, it would be wise to inform your creditors and investors of the change.
How many audits result in positive news? There aren’t many that I’ve come across, but they can and ought to play a significant role in your company’s success. The audit partner at the accounting firm that conducts the audit should know the mortgage executive by their first name. Nobody will ever gain from your firm and your auditors having a hostile relationship. If you don’t get along with your auditor, you should try to patch things up immediately or look for another auditor with whom you can get along.
The relationship with the auditor is crucial, but in mortgage banking, a solid relationship cannot replace knowledge. I advise picking an auditor with at least five mortgage bankers as clients. An auditor with clients in the sector will be more familiar with the regulations; they will spot profitable opportunities that others won’t and are typically a better source for best practices in the industry. You can have a successful auditor by including audited financial statements that your correspondent investors and warehouse banks already trust.
Accounting Principles And Practices
Even though your company is not publicly traded, you must be accountable for everything that occurs within it.
Every executive should review their accounting policies and procedures annually and make any necessary adjustments. Every executive must also abide by the guidelines established by the business. By breaking the established norms, an executive permits others to do the same or to disregard other regulations that have been made.
Should I consult a lawyer?
You should speak with a qualified foreclosure lawyer if you are facing foreclosure due to mortgage default and have already paid for a forensic audit. A knowledgeable lawyer in your area can help you recognize fraudulent activities and take appropriate action.
People facing foreclosure on mortgage loans may feel desperate and be ready to believe in misleading promises and fraudulent claims. Scammers and fraudsters are aware of this. Because of this, a borrower needs to exercise caution and speak with a knowledgeable foreclosure attorney.
The individual who might be able to help you with any ongoing foreclosure troubles you are encountering is also an expert foreclosure lawyer.
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.