Forensic Audit
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DEFINITIONS of the word "Audit":

  • A systematic, independent and documented process for obtaining evidence.
  • A formal examination of an organization's or individual's accounts or financial situation. An audit may also include examination of compliance with applicable terms, laws, and regulations.
  • The physical review of practice records to determine if the practice has been (and is being) compliant with carrier requirements.

    Loan servicing complaints

    Section 6 provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer's required payment.

    A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with Section 6's provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance.

    According to the Truth in Lending Act even a small mistake with calculating the borrower's annual percentage rate could be an actionable violation, enabling the borrower to rescind the loan. Therefore, the threat of a lawsuit is often sufficient to persuade an otherwise uncooperative lender to negotiate an attractive work out with the borrower. Because the Truth-in-Lending Act (TILA) requires all attorney fees to be paid by the predatory lender (in which a new servicer is now the responsible party ), and the vast majority of cases settle out of court quickly.

    Until recently Forensic Loan Examinations were only made available to large banks and lending institutions wanting to determine their own exposure to risk and potential legal liabilities prior to purchasing large pools of mortgage loans.

    Providing the loan audit gives homeowners more ammunition so they can stand a chance in negotiating a decent modification with lenders who have far more resources than the average borrower and often play hardball unless they are faced with the risk of a costly lawsuit.

    Common Abuses:
    Predatory mortgage lending involves a wide array of abusive practices. A  brief descriptions of some of the most common are:

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