A Forensic Mortgage Audit is the comprehensive examination of all loan documents including legal documents, and other evidence important to the mortgage loan. A forensic mortgage audit identifies anything done illegally by the lender, broker, appraiser or other parties involved with the mortgage. During the Audit process we review all documents received from the date of application to the funding date.
A forensic Audit provides a powerful tool for negotiating with the lender. Violations and possible fraud are the leverage used to present the case to the lender and/or the court and come out a winner. The more violations discovered, the better the chances of obtaining a favorable settlement. A successful settlement means your fees will be substantial...
Our Loan Audits “Will” Find
 Violations of Federal, State or Local Laws
The act of using a home as collateral in obtaining a mortgage is covered by numerous federal, state and local laws. These laws are in place to protect the borrower’s rights when a home is used as collateral in a mortgage transaction. We review loan documents to determine if there are differences between the disclosure of information in the loan documents and the disclosure of information required by law.
Constructive Fraud
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which the borrower would want to know before signing the loan papers. Did the broker or loan officer hide or fail to disclose any material facts to the borrower?
Fraud and Negligent Misrepresentation
Were any representations, statements, or comments, written or oral made by the loan officer, broker, escrow or anyone else which contradicted the terms of the documents? When a licensed mortgage professional makes errors it is tantamount to negligent misrepresentation.
Excessive Fees
Were there any excessive fees or improper charges made by the lender or loan broker? Are there any deceptive, abusive or predatory lending practices or an excessive prepayment penalty? Is there a Net Tangible Benefit to the Borrower in the mortgage transaction? Was there a proper analysis to determine if the Borrower could afford the payments on the loan? Were the fees properly disclosed?
Breach of Contract
The note and its attachments are a contract. The lender must follow all the terms of the contract such as the way the interest is calculated, and the penalties are assessed. Were there any terms in the contract which the lender failed to follow?
Once the loan Audit determines deceptive lending practices or any other type of mortgage compliance issue stated above, you have the leverage to fight the lender and win.
Why The Lender Will Want To Settle
An out of court settlement will avoid expensive litigation and the risk of being charged with large fines and the risk of setting a precedent.
Lenders are pragmatic and fully aware that if a loan was funded illegally, the borrower may be entitled to compensation, a refund of all interest and principal payments, closing costs, legal fees and a restructure of the terms of the loan.
An attorney with “documented proof” (the Audit) often will reach a settlement agreement with the lender and hardly ever continue on to trial. With the Audits documented findings of Federal and State Violations the lender will have no choice but to settle.
© 2009 Mortgage Audit Service | 
