What About Forensic Loan Audits?
Forensic Loan Audits - Are They Useful?
With all of the new plans and concepts that the housing industry and government are trotting out to help homeowners save their houses from foreclosure, it seems new words and acronyms are being created everyday. One of the most bewildering that has come into common usage is a "forensic loan audit," which is being sold to numerous borrowers.
But what is a forensic loan audit, anyway? Banks will not just accept one of these as a solution to foreclosure, so why are homeowners being sold more and more of them? These are the questions that any company selling such services must address when meeting with foreclosure victims who are trying to use their scarce monetary assets in the most effective manner.
A forensic loan audit is a detailed examination of the original loan documents, from the closing of the real estate transaction to any refinances, secondary mortgages, and transfers of servicing obligations or ownership of the note between companies. The goal is to find enough errors or evidence to show a possible predatory lending case against the lender.
The main reason to get a forensic loan audit is to show the lender that it would make much more sense just to change the mortgage than to foreclose on the property and risk a lengthy defense. If the borrowers can show enough errors were made on their loan, it will become very difficult for the bank to get a default judgment and move quickly towards the sheriff sale of the home.
Therefore, a forensic loan audit is more like an insurance policy than anything else. For a few hundred dollars, homeowners can go to their bank, show them how difficult it would be to pursue a foreclosure lawsuit, and then negotiate for a loan modification, short sale, or other alternative to foreclosure instead.
Forensic loan audits are most recommended for homeowners who are dealing with a particularly difficult bank. When they are unable to move forward in negotiations and the lender is not communicating, the process may need to be pushed forward. A list of errors and evidence of lender misconduct may be just the jolt the bank needs to keep working on a solution.
A loan audit would also be helpful for borrowers who are dealing with the bank on their own. Those represented by an attorney or third party may not have to worry as much about this process, but those homeowners dealing with the lenders themselves may need an extra bargaining chip. In some cases, such an audit can be very helpful.
About the Author
You can read more of Nick's articles by visiting his site, listed below. He specializes in publishing information that is useful to homeowners in danger of losing their properties to foreclosure, and who are looking for options to save their homes and repair their credit. Visit the site today to download an e-book explaining the basics of the foreclosure process. http://www.foreclosurefish.com/
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