What About Forensic Loan Audits?

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With all of the current programs and ideas that the housing industry and government are trotting out to help homeowners save their homes from foreclosure, it seems new words and acronyms are being born everyday. One of the most confusing that has come into common usage is a "forensic loan audit," which is being sold to numerous homeowners.

But what is a forensic loan audit, exactly? Banks will not just accept one of these as an alternative to foreclosure, so why are owners being sold more and more of them? These are the questions that any company selling such services must answer when meeting with foreclosure victims who are trying to use their scarce financial resources in the most effective manner.

A forensic loan audit is a detailed examination of the original mortgage documents, from the closing of the real estate transaction to any refinances, second mortgages, and transfers of servicing obligations or ownership of the note between lenders. The goal is to find enough mistakes or evidence to show a possible predatory lending case against the lender.

The main reason to obtain a forensic loan audit is to show the lender that it would make much more sense just to change the mortgage than to foreclose on the home and risk a lengthy defense. If the borrowers can show enough mistakes were made on their loan, it will become very hard for the bank to get a default judgment and move quickly towards the sheriff sale of the home.

Therefore, a forensic loan audit is more like an insurance policy than anything else. For a few hundred dollars, owners can go to their bank, show them how difficult it would be to pursue a foreclosure lawsuit, and then negotiate for a loan modification, short sale, or other alternative to foreclosure instead.

Forensic loan audits are most recommended for owners who are dealing with a particularly difficult bank. When they are unable to move forward in negotiations and the lender is not communicating, the process may need to be pushed forward. A list of mistakes and evidence of lender misconduct may be just the jolt the bank needs to keep working on a solution.

A loan audit would also be helpful for borrowers who are negotiating with the bank on their own. Those represented by an attorney or third party may not have to worry as much about this service, but those homeowners dealing with the lenders themselves may need an extra bargaining chip. In some cases, such an audit can be extremely helpful.

Article Source: http://depositarticles.com/

To learn more about the foreclosure process, visit Nick's website, which provides information to homeowners trying to save their properties. Foreclosure refinancing, deed in lieu, loan modification, and bankruptcy assistance can be found, as well as information on preventing a foreclosure before the sheriff sale. You can read more about how to save your home while there is still time and find the site on the web here: www.foreclosurefish.co

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