Home loans taken between 2002 and 2008 are termed problem loans. You might be thinking why so. It’s because, during this period, most creditors issued high-interest loans, refinanced loans, and adjustable-rate mortgages. And the borrowers could not afford them. Also, most mortgages are in some kind of creditor violation.
If you are one of those borrowers, forensic loan audits may help you. It will uncover creditors’ violations as well as help you out in loan modification. With forensic loan audits, you will know the problems associated with your home loan and get a handle to fight unscrupulous creditors in court or negotiate with them for a fair and equitable loan settlement.
What is a forensic loan audit?
It’s a thorough, scientific investigation of a loan to determine if your lender has violated any federal, state, or local laws in the servicing of the loan. A loan auditor performs a comprehensive analysis of a client’s mortgage documents, determining if there are any lender violations associated with their mortgage.
What should you do before hiring a forensic loan auditor?
Though you know everything about a forensic loan auditor, you shouldn’t attempt it without contacting your creditor. Yes, you read it right. The process is against your creditor, but, still, you should connect with the creditor before hiring a forensic loan auditor.
You should contact your creditor the moment you fall behind in your mortgage payments or find it difficult to continue or receive a foreclosure notice. Sometimes, the creditors agree to negotiate a new repayment schedule. If this happens as per your requirements, you will not need any forensic loan auditing.
If your creditor is not ready for the settlement, go for a forensic loan audit keeping the following points in your mind. These points will make the audit effective.
The loan audit shouldn’t be arbitrary; instead, it should be conducted forensically, meaning scientifically. The loan audit should be comprehensive, including the review of every document mentioned in the mortgage contract. None of the documents should be left out to make the case strong. Every mortgage document should be reviewed and compared to all the relevant and applicable mortgage case laws during the loan audit. The loan audit should be in writing, analyzing and indicating the problem areas that you should definitely know.
What’s the reason to consider the above-discussed points?
If you don’t follow them, the creditors will create problems for you. They will harass you by placing hurdles in your attempts to modify your loan. They might delay the audit process and use the time to prepare themselves by not returning your calls. They might give different information every time you call them or use certain other means to stall the process.
The creditors try to avoid the loan audit process, but, after the audit, they willingly cooperate due to the fear of litigation hovering over their heads. When creditors are presented a loan modification audit with evidence of loan violations, they voluntarily work out a plan for the home loan.
What should you consider before the forensic loan audit?
The audit company you choose for forensic loan audit should have trained mortgage loan auditors to handle your case. Just keep in mind that experience matters in any legal condition. The company should willingly and actively take part in the audits.
Certain companies are not trained to handle these audits or they don’t associate themselves with attorneys. The professionals from such companies use half-truths and outright lies to sell services, promising relief to homeowners in distress. They convince the borrowers to hire them and take advantage of the borrowers’ precarious financial situation. So, you should be weary and spot a scam when professional expertise is not involved in a forensic loan audit.
Some of the red flags are:
Automatically closing the foreclosure process, a helpful tool for a loan modification. Discouraging you to contact your creditors, attorney, or credit counselor, people who are important in this situation. Encouraging you to lease your home so the homeowner can buy it back over time Insisting that the mortgage payment should be done to their company and not to the creditors. Compelling you to sign papers without explaining the contents written on them
Should or shouldn’t you opt for the forensic loan audit?
If you are struggling to stay current with your payments so that you don’t lose your house, you should go for a forensic loan audit. The information about your creditors’ violations arms you for a better settlement with the bank and avoids a deficiency judgment. Also, you will strengthen your negotiation position with your creditors. But, this should be your last resort. You should not use this option to get out of the loan that you are capable of performing on the mortgage.
The forensic loan audit helps homeowners in distress. But, we recommend using this option wisely