Homeowners Warning: Beware of new scams using this as a tool to fight lenders by scammers and out of work mortgage brokers everywhere!!! This post is from early 2008 and the times have changed folks. Yes, it can work and help, but when used with a lawyer who can properly represent you.

I have studied and written about the subject of loan modifications probably more than anyone in the world. My studies and writing have opened my eyes to how the loss mitigation process works and what a homeowner needs to do to get a loan modification with their lender or servicer.

What started out has just a blog to help inform and educate consumers, has now given me the insight to see what it is that the homeowner really needs help with in dealing with their toxic and predatory loan. This up close and personal look at what they are facing, has given me the tools and education to help combat predatory lending and stop foreclosure.

The #1 goal of the mortgage audit is to determine whether there were violations of federal law.

If these violations are found, then the borrower may be eligible for complete relief of the predatory loan or a very favorable loan modification.Complete relief of the preadtory mortgage is called as a loan rescission. Meaning the lender takes back the “predatory loan” and awards or credits back to the borrower all interest made on payments thus far, loan origination fees, all applicable lenders fees, penalties and attorney’s fees.

However, in most cases the borrower may be uneligible to rescind their loan because they are just too far underwater to obtain a mortgage and their credit rating may have been adversely affected by the loan that has cause them pain and suffering.

The most common option is just to mediate the loan with your lender and fight for an affordable loan modification based on the legal violations on the loan. Everyone wins here.The homeowner has their loan fixed and may have their principle balance may be reduced also. The lender does not lose their shirt because they have mediated the matter without employing their full legal staff on the file and wasting operating expenses.

What do we do on a forensic loan document review for attorneys or borrowers? Let me tell you.
FORENSIC LOAN DOCUMENT AUDIT

  • Complete client interview and all applicable parties
  • Complete loan document and disclosure audit by 30 year underwriting and fraud and compliance mortgage professional
  • Truth in Lending Act (TILA) and Real Estate Settlement & Procedures Act (RESPA)
  • Reverse engineering of your loan terms and Annual Percentage Rate (APR) for possible TILA violations
  • Complete 15 page report with all violations and findings

CONSTRUCTIVE FRAUD

Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the broker or loan officer or anyone working for the broker or loan officer 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, notary or anyone else which contradicted the terms of the documents?

NEGLIGENT MISREPRESENTATION

When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.

BREACH OF CONTRACT

The note and its attachments are a contract. The broker must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow?

LOAN AUDIT REPORT

  • Results report of all factual findings of the forensic audit
  • Any and all applicable federal law violations
  • The real terms of your loan
  • Outline of hidden fees and/or commission earned by your broker or lender
  • A complete assessment so you can pursue possible legal claims against your broker and/or lender