Importance of forensic mortgage loan audit

Forensic mortgage loan audit is a type of audit that is performed on your mortgage loans to check if there are any violations. During the period between 2002 and 2006, the number of mortgage loans that were extended had many violations. As such the number of borrowers falling behind on payments increased greatly. In majority of the cases, it is found that mortgage lenders violate federal rules. And these violations are caused either unknowingly or intentionally to trick borrowers into fraudulent practices.

Forensic mortgage loan audit is mainly performed by attorneys and legal experts. A thorough check of all the documents related to your mortgage loan is made. In case you are facing foreclosure and for some reason or the other if it is found that the mortgage you have taken out has violations, the foreclosure proceedings stop immediately till the time the dispute is settled. You stop making your monthly mortgage payments too.

The findings of the forensic mortgage loan audit are documented in what is known as the forensic mortgage loan audit report. If it is proved that your mortgage loan has violations, the lender is bound to compensate for the harassment he has caused. The settlement or the compensation may be in the form of attorney fees, modifying the terms of the loan to make the monthly mortgage payments more affordable etc. Altering terms may include lowering interest rates, reducing the principal amount or lowering the monthly payments. There are several instances when the settlement or compensation may also include delaying or preventing foreclosure. Under certain conditions, the amount you pay as interest payments is returned to you.

Scenario:

A couple from Colorado had taken out a mortgage at an adjustable-rate. They were regular with their monthly mortgage payments until the rate of interest escalated sharply that prevented them from making regular payments. Since they were on the verge of losing their house, their attorney suggested that they opt for forensic loan audit. They hired the services of an attorney who performed a forensic mortgage loan audit. It was found out that there were severe violations in the mortgage terms. The foreclosure process was stopped immediately. As settlement the lender was asked to modify the terms of the mortgage.

Forensic mortgage loan audit can act as a weapon for defense of homeowners. A slight deviation from the Truth in Lending Act can attract severe penalties for the lender.

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