Mortgage Audits
The forensic loan document audits are designed to identify potential cases of predatory lending law violations. Our team of mortgage professionals will thoroughly review the loan documents, and recalculate the substantive numbers to identify instances of failure to disclose accurate data to your client.
Please note that our forensic audit only looks for federal law violations. Your state may have additional, and more restrictive, laws which you need to be consider for your client.
Keeping in mind that the goal of the forensic loan document audit is identifying violations of federal law, your goal with the results is to use these violations to apply pressure to the lender so that your client will get a more beneficial result. When violations are found, your client may be eligible for damages through litigation, which in some cases may include rescission of the subject loan.
Rescission means a principle reduction. Of course, if rescission is available, your client will need to produce the tender amount due. This is important to understand as many homeowners are in no position to tender as the value of the subject property has fallen drastically. Fortunately, many lenders offer what has been called “equitable rescission,” and if your jurisdiction allows this relief, you may be able to keep your client in his or her home.
– Our staff will conduct a telephonic interview with your client to identify the parties involved in the underlying loan transaction
- DISCLOSURE ANALYSIS – Our staff will review the loan documents for missing dates and signatures, recalculate the Annual Percentage Rate and Closing Fees as well as other material values set forth in those documents. If the disclosures are materially deficient, our staff will identify those “failures to disclose” to you.
- TILA, RESPA, AND HOEPA ANALYSIS – Your client may have gotten a closed-ended loan which was disguised as an open-ended line of credit. If this is the situation, your client may have a solid case against the lender. Identifying some violations of federal laws requires not just recalculating numbers but looking at the underlying nature of the loan compared to the way the loan was presented to your client.
- WRITTEN REPORT – You will receive a written report of the results of the forensic loan document audit.
Some of the issues that our forensic loan document audit might find are:
- CONSTRUCTIVE FRAUD – Material facts include the terms of the loan, whether there is a prepayment penalty or any other information that a reasonable borrower would want to know before accepting the loan. Did the broker, loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower? What about third parties?
- FRAUD AND NEGLIGENT MISREPRESENTATION – Our audit reviews the representations, statements, and comments (written or oral) made by the loan officer, broker, notary and others for contradictions.
- NEGLIGENT MISREPRESENTATION – Mortgage professionals makes errors, but if those errors are below the standard of care for that professional, your client might have a valid case for negligent misrepresentation.
- BREACH OF CONTRACT – The mortgage note and its attached documents constitute a contract. The lender is obligated to perform the duties set forth in that contract, including accurate calculations of the amounts involved in the mortgage.
