Mortgage Law, Mortgage Modification, and Foreclosure: Forensic Mortgage Audits

Hi Everybody. Today I want to talk about Forensic Mortgage Audits; what are they, how they are supposed to work, and do they work. Many people out there today are having trouble with their mortgage. Clearly. There is a ton of misinformation out there regarding help as well. This firm used to do Forensic Mortgage Audits so we speak from experience. Let’s talk about it.

A Forensic Mortgage Audit is basically an attempt to uncover mistakes or legal violations in you loan or loan documents. A company will tell you that they will audit your loan, find mistakes and then use them as leverage to force your lender to modify your loan. Sometimes they promise more like compensation or even getting your home for free.

They are looking for several things in an audit:

1) RESPA Law violations;

2) TILA law violations;

3) Accounting errors; and

4) other general irregularities or legal violations. So let’s say they find some of these, what next?

The idea is that you can put legal pressure on your lender to modify your loan and put you in a position where you can pay your mortgage. These auditors assume that this can’t be done without this kind of work. Sometimes they are right, it can’t be done without this kind of pressure. For an explanation look at my series on how the Making Home Affordable Plan works, especially the income and expense piece. So let’s say they’ve uncovered violations in your loan and you are in a situation where you otherwise wouldn’t qualify for a loan modification. What does your bank/lender do when confronted with these problems?

They say, “go fly a kite“. They don’t care. They are FAR too busy with modifying loans for people who are going through normal channels to deal with extortion. Have you ever heard the phrase “you catch more flies with honey than with vinegar”? You are running into a situation where you are trying to force the banks to do something. How do you force the bank to do something they don’t want to do? You have to sue them! Do you have at least $70,000 to front for a lawsuit? You can expect to spend at least that much. This is the fatal flaw in hiring a forensic mortgage auditor.

You will pay far more money for one of two things:

1) The same result you would get trying to modify through regular channels


2) No result because you don’t qualify for a modification anyways.

If you are considering hiring a forensic mortgage auditor you better think hard and check references carefully. This firm stopped doing it when we realized how far we got with honey.

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