Forensic Loan Auditors: Are they helping or hurting struggling homeowners?
A Forensic Loan Auditor, purportedly, reviews your mortgage loan documents to determine whether your mortgage lender violated any state or federal mortgage lending laws when they funded your loan.
We always wondered if these outfits were really helping homeowners. We couldn’t quite figure out how just finding problems with the loan documents, and not actually using that information to defend the foreclosure, was helping homeowners.
Well, the Federal Trade Commission (FTC) has a released a consumer alert, Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud, which states that these mortgage audits are “the latest foreclosure rescue scam to exploit financially strapped homeowners…” The alert goes on to state the following:
In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors, mortgage loan auditors, or foreclosure prevention auditors backed by forensic attorneys offer to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The “auditors” say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan.
Nothing could be further from the truth. According to the FTC and its law enforcement partners:
- there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.
- some federal laws allow you to sue your lender based on errors in your loan documents. But even if you sue and win, your lender is not required to modify your loan simply to make your payments more affordable.
- if you cancel your loan, you will lose your home and you will have to return the money you borrowed to your lender.
It is our standard practice, as foreclosure defense attorneys, to review ALL documents relating to the purchase and possible foreclosure of your home for potential defenses. We often find ourselves, due to no fault of our own, reviewing and drafting hundreds of pages in a short period of time. This is very labor intensive work, but we take pride in stopping unnecessary foreclosures and providing our clients with an opportunity to remain in their home.
As always, The Foreclosure Defense Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, NY. Contact us at (516) 858-2620 to arrange a consultation with a foreclosure defense attorney.