Servicing is also impacted by mortgage securitization. Most mortgages are securitized, meaning the loans are bought, sold, and bundled together to form a profitable mortgage security to trade on the capital markets. Despite the fact that these securitizations can take a variety of shapes, they are typically referred to as MBS or mortgage-backed securities.
How does the securitization of mortgages affect homeowners?
If a mortgage is securitized, timely mortgage payments by homeowners are unaffected. Even though the organization handling the loan’s servicing may change when a loan is securitized, the homeowner simply keeps making monthly payments to the servicer.
But for homeowners who are having problems making payments, it does matter who owns the loan. As was discussed in our second video, the investor—or the loan’s owner—determines which assistance choices are available to struggling homeowners.
The limitations for each investment also differ. For instance, the rules for loans provided by Ginnie Mae, which are securitized, are different from those for loans made by Fannie Mae and Freddie Mac.
The servicer must buy the debt from the securitization before the borrower can be given a loan modification offer in Ginnie Mae securities. As a result, it is more challenging to present a modification with an interest rate that is lower than the market rate. The specific contracts between the securitization parties govern the servicer’s toolkit for loss mitigation in securitizations without government intervention.
Options for loss mitigation were more difficult to implement before the housing crisis. More homes that were in debt just went into foreclosure as a result. One of the effects of the crisis has been the creation of a more comprehensive toolkit for servicers to utilize in preventing foreclosures and assisting struggling homeowners.
We can help homeowners and give many Americans a chance to generate wealth by fostering a healthy and efficient mortgage servicing industry.
How Do Forensic Audits Work?
The reality of a forensic audit is a little less thrilling than it would sound from criminal dramas like Law and Order or CSI. In a forensic audit, the financial accounts of an individual or business are examined to see if they are true and legal. Although forensic accounting is most frequently linked with the IRS and tax audits, private businesses may also hire it to create a comprehensive picture of a single entity’s financial situation.
The Use of Forensic Audits
Forensic audits are used wherever an entity’s finances raise a legal issue. It may be used, among other things, to look into charges of bribery or embezzlement, establish tax liability, look into a spouse during divorce procedures, or examine cases of suspected fraud or embezzlement.
To follow a money trail, maintain track of fake and real balance sheets, and look for errors in broad and specific reports of revenue or expenditures, forensic audits are carried out by a class of experts with backgrounds in both criminology and accounting. If they discover disparities, it may be the auditor’s responsibility to look into them and ascertain their cause, or it may fall to a different financial investigator.
Forensic Auditing Quality Control Auditing
Although many people identify auditing with finding problems, it can also be useful in strengthening a company’s current sound business processes. Many businesses self-assess frequently to ensure that production and workflows are efficient and waste-free. Regular audits of strong financial processes help a company’s reputation with shareholders, customers, and clients, and the audit report gives management a clearer understanding of the company’s internal finances.
Of course, this could have a negative outcome if the auditing firm is engaging in fraud or colluding with the firm or its managers to fabricate reports. In this situation, a judge or an independent company may ask for a forensic audit to ascertain the income lost due to a fraudulent report or to ascertain the harm that false reports caused to:
How far back may the IRS audit you?
A prosecution or a lawyer acting on behalf of an interested party may present forensic audits as proof. Due to the finance field’s complexity, forensic auditors frequently employ extremely specific language when describing a company’s financial status. This necessitates either having the auditor explain the relevance of the audit themselves or having a prosecution or lawyer rely on expert witnesses to do so in order to develop a case.
The personnel working for the company being audited should not be involved in forensic audits. In actuality, however, auditors frequently become overly reliant on internal corporate personnel to grant access to all relevant information. In other words, when it comes to granting access to staff, papers, and computer systems, management may be excessively reliant on auditors. When management purposefully or inadvertently misleads the auditors, this is known as “audit reliance,” and it can cause issues. When an auditor misses a fraud or an error because they have grown too reliant on management, it can have catastrophic repercussions.
A comprehensive data protection strategy must still be used in addition to forensic auditing, which is not a guaranteed fix. In contrast to conventional security audits, forensic auditing aims to examine the full ecosystem of data protection tools, processes, and individuals. Although both types of audits search for potential weaknesses, forensic audits are meant to hunt for signs of questionable conduct (e.g., unauthorized access, modification, and deletion of sensitive data).
Traditional security audits work to stop unauthorized access to systems, whereas forensic audits look for signs of such access. Examining logs, keeping an eye on systems, and speaking with personnel can all help with this.
Forensic audits can assist in locating system perimeter weaknesses as well as patterns of activity that might point to criminal intent (e.g., stolen credentials or unauthorized access).
At Mortgage Audit Online, we have qualified professionals who can help you through the foreclosure process. Our team consists of foreclosure attorneys and forensic auditors who are ready to give you a helping hand. We will help you from the beginning till the end of your foreclosure process.
We have helped so many homeowners say their home and yours won’t be an exception. Contact us today to book an appointment. Please don’t wait till it’s almost too late before you take the right step.
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.