Mortgage Loan Forensic Reports With Affidavit

Financial affidavits paint a full picture of your financial status at the moment of signing. Financial affidavits, also known as financial statements, net worth statements, financial disclosure affidavits, and statements of financial affairs, are crucial records in divorce, child support, and bankruptcy proceedings, among other legal proceedings. Understanding financial affidavits better might be important for both your personal and professional life because they are at the center of many legal proceedings and commercial transactions.

A Financial Affidavit: What Is It?

A financial affidavit is a declaration of your income, expenses, debts, and assets that are known by a different name in every state. It enables a judge to determine the appropriate amount of spousal support and child support to grant. Additionally, it demonstrates whether a business is strong enough for investors to invest in it and helps a business determine whether to provide a loan.

What Is a Forensic Audit for Foreclosures?

An examination of a person’s or organization’s financial data in preparation for potential legal action is known as a “forensic audit.” It is a particular type of investigation carried out by auditors with forensic auditing expertise. The audit’s goal is to look into the likelihood that a crime of some sort was committed, like the following:

To defend against foreclosure, forensic audits have also been used to examine how mortgage loans were created. Federal agencies that finance home loans frequently employ a forensic audit as a method to identify fraud committed by borrowers rather than lenders.

What Role Do Forensic Audits Play in Foreclosures?

To ensure that the data used to analyze the borrower was used appropriately, a valid forensic audit employed in foreclosure may be able to evaluate all the documents used in creating a house mortgage loan. These audits’ objective would be to find mistakes made by mortgage underwriters. The evaluation of loans made at the height of the housing boom may have benefited greatly from this kind of audit. Many loans were given out at that time to people buying homes they couldn’t afford.

With proper forensic audits, it may be possible to identify predatory lending practices that may be against the Truth in Lending Act or other state and federal laws governing mortgage lending.

The legality of Forensic Audits for Foreclosures

Consumer protection organizations were intrigued by several of the procedures utilized in forensic audits for foreclosure. It was found that consumers facing foreclosure were being sold forensic audits that were, in fact, fake. These audits were promoted as a tool for assessing all the paperwork used in foreclosure preparation.

Numerous of these so-called audits were frauds despite their claims to be a means of saving borrowers. Several elements could render these “audits” false or illegal, and they cannot provide the kind of relief that a borrower facing foreclosure needs, which is their main drawback.

Another problem is that many of these businesses advise their clients to pay them several hundred dollars to perform a forensic loan audit in the hopes of identifying lending irregularities that could cause the mortgage to be voided.

These assertions, however, frequently lack any basis in reality. They just endanger the borrower by squandering their money on a service that won’t help them prevent foreclosure. They would be better off using their money to pay down their past-due mortgage or to take the necessary actions to exit a house loan they can no longer afford.

The so-called “auditors” would advertise their services by stating that a borrower may utilize the audit report to avoid foreclosure, quicken the loan modification procedure, lower their loan principle (i.e., the amount they owe), or even cancel their loan.

However, these assertions were untrue and deceptive. They are fraudulent, in the opinion of law enforcement and the Federal Trade Commission (FTC), for the following reasons:

• No evidence existed to support forensic loan audits’ ability to assist borrowers in obtaining loan modifications or any other type of foreclosure relief. The type of relief sought by the borrower and promised by those marketing the service would not be provided even if the audit was carried out by a licensed, skilled auditor, mortgage professional, or attorney;
• No payment relief: Under certain federal statutes, a borrower may bring a claim against their lender for mistakes in the loan paperwork. The mortgage lender would not be obligated to alter the borrower’s loan simply to make their payments more manageable, which is what the borrower facing foreclosure requires, even if the borrower were to sue and prevail;

A borrower would have to refund the borrowed money, which would require selling the house they purchased with the borrowed money if they had grounds to cancel their home mortgage loan. This is not a solution. Therefore, this does not address the borrower’s issue. The borrower wants to remain in their current residence.

The FTC urges homeowners who want to stop their mortgage from going into foreclosure to be wary of additional scams, like the following:

• No one can promise to stop a foreclosure, regardless of their level of expertise; anyone who makes such a claim is lying;
• Anyone who advises a borrower not to speak with their lender, attorney, credit counselor, or housing counselor is setting them up for a fraud or other scams because a borrower’s lender, attorney, and housing counselor are the individuals who can assist them if they are in default on their mortgage;
• anyone who insists on charging for their services upfront and only accepts cashier’s checks or wire transfers as payment;
• anyone who suggests to a borrower in default that they rent their home so they can eventually buy it back;
• anyone who advises the borrower to send their mortgage payments to them directly;
• Anyone who encourages a borrower to transfer their property deed or title to them; by doing so, the borrower would be transferring ownership of their house to that person or business; of course, a borrower should never do this;
• Anyone who makes the borrower sign documents they haven’t had a chance to read all the way through or don’t comprehend under duress.