Loss Mitigation Specialist · Jacksonville, FL · Member since 2008 · 49 posts · 0 votes
Anyone out there has any experience or results with forensic loan audits?
I know companies that start doing that, but I don't know about any results as it is take a very long time to finish it.
:roll:
I know how is that work, but I don't know about any rsults.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y
After glancing thorugh this thread, there appears to be some bad information.
A fornesic loan audit is not the process of having you or your attorney tell the bank to "produce the note" which some have done to stall their foreclosure process.
Rather, a fornesic loan audit (at least a real one) is where an experienced attorney goes over your loan documents as well as the appraisal documents and idnetifies (if they exist) any violations in the TILA (Truth in Lending Act), loan fraud, appraisal fraud, RESPA violations, etc. Armed with these violations, you can then approach the bank not with your hands out begging for a loan mod, but with the threat of a lawsuit and demand that your loan be restructured, often times, receiveing funds back that you were overcharged, either in interest, or in fees, sometimes both.
Very few attorneys now this real process and many claim to provide the service, but all they use is some computer software to examine the loan documents. This same software was designed by the banks to use for themselves to help insure they do not violate TILA and RESPA laws. Obviously, their is no computer software replacement for real eyes on the docs.
Real Estate Investor · Austin, TX · Member since 2009 · 118 posts · 76 votes
16y
I sat through a presentation from a forensic loan audit company once. They told me the goal wasn't to forgive the loan but to negotiate the loan modification better. Also, the banks during an audit are much more open to negotiating rather than sending to foreclosure. So if you want a 5% loan, you can keep negotiating from 5.5% on knowing you most likely won't be sent to auction.
The point being, according to the group, that if you are renting the house while you're having a forensic loan audit on, you can keep negotiating the loan mod for months and collect rent until you finally accept the new terms.
The cost was about $4000 for the audit, legal fees, and loan modification.
However, I don't know how successful they are if the home owner of a forensic audit doesn't have a job.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
16y
That makes is sound like the audit is nothing more than a delaying tactic. Is the audit itself actually accomplishing anything more than creating the delay? I'm like you, Bryan, I've heard there have been cases where the audit made a loan go away, but nothing more.
Further, to really show these are worthwhile, you'd need data of all the attempts and their outcomes. And you would need a control group of similar situations where an audit wasn't done. $4000 is a steep price. Lots of months of rent just to pay for the audit. To justify that kind of price, there should be some real evidence of the outcome. A few anecdotal stories are not evidence, IMHO. Those few "successes", and I'm still unclear on success, could have come from hundreds of people paying $4000. And could come without the audit, too. Pardon me if I continue to be skeptical of this whole approach.
Real Estate Investor · Austin, TX · Member since 2009 · 118 posts · 76 votes
16y
I don't know of any real world success stories on forensic audits, just the theory behind it. I'm really not into taking over properties subject to and performing loan mods or audits. Just not my cup of tea. Too gray for my business plan. But that's just me.