HOA Foreclosure
April 18, 2016
Investors Beware: Foreclosures
August 8, 2016

Homeowners Beware

June 2016

Mortgage Relief Scams: Forensic Loan Audits

According to the Federal Trade Commission (FTC), the latest foreclosure rescue scam to exploit desperate homeowners pitches forensic mortgage loan audits. I have had several clients recently provide me with this said “forensic loan audit”. My clients that have paid for these reports suggest and urge me to use the reports as evidence and leverage in court. As a lawyer, I can say with confidence that there is no value provided in these reports. These reports include pages and pages of general legal terms and securities jargon. Seriously- ask me and I’ll send you a copy of one of these reports.

The forensic auditors’ pitch- they say you can use the audit report to stop a foreclosure, force the loan modification process in your favor, reduce your loan principal amount, or even dismiss and cancel your loan.

In exchange for an upfront fee, so-called forensic loan auditors, mortgage loan auditors, or foreclosure prevention “experts”, supposedly backed by attorneys, offer to review your mortgage documents to see whether the lender complied with state and federal mortgage lending laws.

Nothing could be further from the truth. According to the FTC:

  • 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 are in default on your mortgage or facing foreclosure, avoid being the target of a foreclosure rescue scam. Consult with your bank/lender first and see if there are available options for you. If not, consult with a real estate lawyer immediately.

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