mortagesandforeclosures

by Arnold Stadneck

Of the 2 or more million mortgages that were funded between 2000-2007, many of these loans were funded unlawfully. During that period, bankers, lenders, mortgage brokers, appraisers and others in the industry enjoyed very prosperous times. Many of these people performed their jobs responsibly, while others performed their duties illegally. Prosecutions are continuing as these predatory lending violators are being brought to trial.

Your loan may be unlawful, and you may be entitled to substantial damages whether or not you are currently in foreclosure. A forensic loan audit looks for violations of federal, state and predatory lending practices. Approximately 85% of forensic loan audits to date have uncovered violations in the TILA (Truth in Lending Act), Good Faith Estimate, RESPA (Real Estate Settlement Procedures Act), and in the Predatory Lending and Real Estate/Mortgage Fraud regulations.

The only way to be sure if your mortgage contains lending irregularities is to perform a forensic loan audit. In essence, a forensic loan audit is a comprehensive review of your most recent loan package, line by line, page by page. The purpose of the examination is to identify any illegalities performed by the lender, broker or any other parties in conjunction with the loan.

This is important because for a lender to be able to foreclose on a mortgage, that loan must be a legal contract. Loan violations are serious legal offenses and lenders are subject to heavy fines and legal penalties for breaking these laws. For the most part, financial institutions are run by rational business people, who do understand the financial consequences of their mistakes and usually want to avoid expensive litigation or risk being charged with large fines. When they are shown proof of their mistakes and backed up against the wall, lenders are more readily agreeable to working on terms more favorable to the homeowner.

How does a forensic audit help the homeowner? Mortgage violations are the basis by which your case can be argued with lenders. Generally, the more severe those violations are, the better your chances are of obtaining a favorable settlement. This settlement can include punitive damages, attorney fees, more affordable loan terms (such as a lower interest rate, lower monthly payments and/or a principal reduction), a delay or prevention of a foreclosure sale and more. When you consider the chances of any lender getting a favorable jury decision in any court in the country, one can understand why the lender might be inclined to negotiate a settlement.

There is a saying with universal application that states that a person who elects to represent himself has a fool for a client. This is not the time or the place to try to test out your negotiating skills. There is far too much at stake. Your best course of action is to hire an attorney who is skilled in mortgage lending and real estate law. And particularly one who knows and understand the forensic audit principals. He or she will determine the proper course of action. If your loan is found to contain irregularities and is considered unlawful you may be entitled to compensation and other awards. At worst, you can be assured of an attractive loan modification on terms more to your liking.

What is predatory lending? Dishonest behavior by many lenders, bankers, brokers and their sales force has caused the recent collapse of the financial markets. Examples of loans that may be considered predatory include pay option arms, stated income loans, bait and switch loans, elder abuse and other similar type loans where unscrupulous mortgage lenders and/or banks took unfair advantage of the borrowers.

If you are serious about saving your home and getting your life back on track, a forensic loan audit may be exactly what you require. A forensic loan audit may uncover certain irregularities which in turn will give your legal negotiators the ammunition they need to work out a favorable loan modification program for you. Many homeowners such as yourself are able to work out lower monthly payments, reduced interest rates and even principal reductions. Your home and your family's well being could be at risk. You owe it to yourself and your family to pursue all available options. Remember, the worst thing you can do is to do nothing.

About the Author:

Arnold Stadneck, a retired building inspector, never heard of a forensic loan audit. When he refinanced his sprawling lakefront home in December 2002 he had no idea that he would be one of thousands of borrowers, caught up in the financial turmoil, applying for a loan modification less than 5 years later.

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