If you have taken a home loan between 2002 and 2008, there is every possibility that your creditors have saddled you with a high-interest loan that you may be finding difficult to repay. This is because, during this period most creditors had issued high-interest loans, refinanced loans, and adjustable rate mortgages. Do you suspect that your creditors are not above board on your loan or mortgage? Your best option is to go in for a forensic loan audit.

It is not surprising that home loans issued during the said period are termed problem loans.

Why is it so?

It is because the borrowers could not afford them due to high-interest rates. Add to this the fact that more than 80 percent of all mortgages are in some kind of creditor violation. For this reason, a forensic loan auditing becomes an essential tool not only to uncover creditors’ violations but also to help you out in loan modification.

Although banks are equally at fault for issuing such problem loans without determining the borrowers’ income or ability to pay. By hiring certified forensic loan auditors, you will not only get to know the problems associated with your home loan, but also get a handle to fight unscrupulous creditors in court or negotiate with them for a fair and equitable loan settlement.

What should you do before going in for forensic loan auditing?

If you are behind on your mortgage payments, instead of exploring legal avenues and hiring an attorney and a forensic loan auditing company, it is best to keep the lines of communication open with your creditors.

First step:

Contact your creditors the moment you fall behind in your mortgage payments or find it difficult to continue or have received a foreclosure notice. The creditors may agree to negotiate a new repayment schedule. However, if this is not happening, opt for a forensic mortgage auditing by all means.

Forensic loan audit

By going in for forensic loan auditors, you can get a thorough forensic loan audit done for your loan. Such auditing involves a scientific investigation of your loan that brings to fore any federal, state or local laws violations committed by your creditors while extending the loan to you.

Forensic mortgage auditors are trained in performing such comprehensive analysis of mortgage documents. Hence, they can pinpoint any violations associated with the mortgage. They are in the best position to know how to do a forensic mortgage audit.

Essential elements of an effective loan audit

So, you have decided to get the loan audit done? Be aware of some essential elements of an effective loan audit. These are:

The loan auditing should not be arbitrary but conducted forensically, that is, in a scientific manner.
A loan audit should be comprehensive and entail the review of every document mentioned in the mortgage contract.
Auditing should compare the reviewed mortgage documents to all the relevant and applicable mortgage case laws.
Loan auditing should be reduced to writing with an analysis of the problem.

In the absence of the above steps, the creditors can harass you by placing hurdles in your attempts to modify your loan. They may resort to delaying the process by not returning your calls, giving different information every time you call or using certain other means to stall the process.

However, presenting a loan modification audit to the creditors with evidence of loan violations will make them willingly cooperate with you. With the fear of litigation hovering over their heads, they will voluntarily workout a plan for your home loan.

Tips for a forensic mortgage audit

Ensure that the audit company you choose for forensic loan audit has mortgage loan auditors who are trained to handle such audits. The company itself should be willing to associate itself with your forensic loan audit attorney.

So, never take the claims of such companies at face value. Even the Federal Trade Commission (FTC) warns home loan borrowers regarding such companies that have fraudulent foreclosure ‘rescue’ professionals on its rolls. These unscrupulous professionals lie or somehow convince the borrowers to hire them promising false relief. In other words, they take advantage of your precarious financial situation.

Your first job is to spot a scam while contacting such forensic loan audit companies. According to FTC, some pointers to spot a scam are:

Automatically get the foreclosure process stopped, which actually is a helpful tool in a loan modification, short sale or other options.
Discourage you from contacting your creditors, attorney or credit counselor, which is a must in a situation like this.
Encourage you to lease your home so that your homeowner can buy it back over time.
Insist that the mortgage payment should be made to their company, rather than to your creditors.
Compel you to sign papers without explaining the contents.

Is forensic loan audit required, if you decide to go in for foreclosure?

If you are unable to pay your mortgage, you may opt for a foreclosure, instead of modifying your mortgage. Even in this, going in for a forensic loan audit is still in your best interest. This is because this audit will not only reveal the violations committed by your creditors, if any, but will also help you in understanding your financial status.

The information about creditors’ violations will arm you for a better settlement with the bank and also help avoid a deficiency judgment. This will also strengthen your negotiation position with your creditors, especially if you are struggling to stay current with your payments, so as not to lose your house.

This said you should keep this tactic as your last option. Use it if you feel wronged by the loan or feel that your creditors have taken undue advantage of your circumstances. Never use it to get out of a loan that you are capable of performing on the mortgage.

However, if you do opt for loan auditing, a forensic loan auditor, and a forensic loan audit attorney become indispensable. They will provide you with clear directions as to how best to proceed.

Conclusion

Although experts recommend forensic loan audit as a last resort in negotiating with your creditors, it is certain to arm you with the knowledge of any violations committed by them. If proved, it may be of immense help in bringing your creditors on the negotiating table.