A mortgage audit and a forensic loan audit are one and the same. I am not opposed to a forensic loan audit, I just want homeowners to understand what they are purchasing and what the investigation attempts to uncover. Most forensic loan auditors will do a TILA and RESPA review and find violations, discrepancies, and errors that will disclose predatory lending practices.
Predatory lending practices use abusive tactics that are intended to coerce and steer low income, minority groups, elderly and the sick into mortgage loans that offer higher interest rates, excessive fees and abnormal and unnecessary products.
Most people think that the violations will be used to get their house back free and clear. This won’t happen. Often times the violations are used to offset a foreclosure or defaulted payments. It does help with justifying the harm done if you’re seeking mortgage relief, however, it is rarely used to make an entire case stand up in court.
The Secret about a Mortgage Audit
So having said that, here’s what they don’t tell you. TILA and RESPA violations have statutory limits of 1-3 years. So, this makes it almost impossible for most homeowners to use this tactic in court when the loans are beyond the statutory limitations.
Banks and lenders use very sophisticated computerized systems that can calculate, configure and are designed to comply with all of the federal and state compliance laws, therefore, it is difficult to find errors when reviewing TILA, RESPA, HUD1 Settlement and disclosures for violations.
When California State Attorney General Jerry Brown sued Countrywide, he set aside the forensic loan audits that were done because he knew that there would be very little hope in winning. However, he chose to use documents such as loan applications, credit reports, accounting statements, advertisements, and any documents that could prove to exhibit predatory and deceptive practices.
It is important to understand the main objective of your lawsuit if you are or intend to sue your lender and are seeking some sort of relief to stay in your home. Your loan documents and accounting records will probably be of more service to you than using just a forensic loan audit.