Forensic Mortgage Audits Add Leverage For Distressed Homeowners
Forensic mortgage audits are being used as leverage for attorneys and mortgage modification
experts to negotiate affordable work out plans with borrowers facing foreclosure. Studies show that at nearly 80 percent of mortgage loans contain State and Federal Violations.
Many mortgage loans originated during the years 2001 2005 contained legal violations; some were unintentional; some were blatant acts of fraud. The mortgages originated during this time frame were large contributors to the mortgage meltdown which has resulted in a flood of home foreclosures during the last few years.
Whether the violations and errors in a mortgage file are just innocent oversights or acts of carelessness, greed or fraud by the lender or mortgage broker, they can carry serious legal consequences, fines and penalties for the lender. In many cases, the lender can be forced to refund all interest paid from the origination date back to the borrower.
A forensic mortgage examination is a comprehensive investigation of a mortgage loan file to determine if there were errors or violations of a borrowers rights under the Truth in Lending Act. When mortgage loans contain errors or illegal terms or conditions, they are not enforceable; therefore any foreclosure action must be stopped when litigation on a questionable loan is started. Mortgage payments to the lender can be discontinued; however, they should be deposited to an escrow account during legal proceedings.
In addition to determining the enforceability of a mortgage loan, a forensic loan audit adds leverage to a distressed homeowners negotiating power when they are attempting to get a mortgage modification. A lender will be compelled to cooperate in modifying a mortgage if errors or violations are found during a mortgage file examination. Lenders understand that they are much better off agreeing to an affordable work out plan than going through a long, expensive lawsuit.
This article was written by Ralph Mark Maupin, a real estate professional who has been in the industry for over 25 years. County Loan Modification helps distressed home owners in South East Michigan keep their homes by modifying their mortgage to an affordable and sustainable loan. Through diligent representation of homeowners, they negotiate a modification or resolution with lenders. Learn more at http://www.mymortgageauditor.com
by: Nichole Jackson
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