Here’s a short list of things to look for in your next loan audit:
* Your loan auditor should not promise to uncover lender
violations; it’s not a guarantee that can be kept.
* A good loan audit is comprehensive and involves a review of
every document in your client’s mortgage contract.
* A loan audit should be forensic; that is, scientifically conducted.
* Should be performed by human eyes, not a computer.
* Mortgage documents should be reviewed and compared to all
relevant and applicable mortgage case law.
* Your loan audit should be in writing with an analysis indicating
problem areas that your client should know about.
In the end, your loan audit should give you a clear indication on how
best to proceed with negotiations for better mortgage terms for you or your
client. If it doesn’t do that then you’ve paid too much for the loan
audit at any price.
Most loan violations occur in loans that were originated between 2002
and 2008. During that time many lenders issued high interest loans,
refinanced loans, and ARMs - adjustable rate mortgages. Those types of
loans are the most often problem loans for the homeowners because the
borrowers end up not being able to afford them. The banks should never
have issued those loans based on the borrowers incomes and ability to
pay. That makes them bad loans.
That’s not to say that if you have a loan that originated in those
years that you automatically qualify for a loan modification. Your
loan is not necessarily bad because it was issued during this time
frame. But the fact that your loan originated during that time puts
you in a high risk category. If you think you may be headed toward
foreclosure or you’ve been getting foreclosure threats from your bank
then you should seek assistance from an attorney and request a loan
audit. The loan audit will tell you if your lender has violated any
applicable law and give your negotiating power in seeking a loan
modification.
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