What do I mean?  Simply that finding an error is only valuable if you know what law or statute provides a remedy.  On top of that a lawyer will need to examine the remedy to see if is is specifically applicable.    A good audits is invaluable to proper mortgage or foreclosure defense assistance.  Before paying for something that you have no idea of the value or even what the finished product looks like is very risky.  At a minimum an “auditor” should be able to provide you with:

1. An example of an actual audit.
2. A rock solid BBB record.
3. Proof of filed legal cases leveraging results of an audit.

Absent these three items, go looking for a different auditor.

- The Bank Slayer

Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud

Fraudulent foreclosure “rescue” professionals use half-truths and outright lies to sell services that promise relief to homeowners in distress. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, the latest foreclosure rescue scam to exploit financially strapped homeowners pitches forensic mortgage loan audits.

In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors, mortgage loan auditors, or foreclosure prevention auditors backed by forensic attorneys offer to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The “auditors” say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan.

Nothing could be further from the truth. According to the FTC and its law enforcement partners:

• there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.
• some federal laws allow you to sue your lender based on errors in your loan documents. But even if you sue and win, your lender is not required to modify your loan simply to make your payments more affordable.
• if you cancel your loan, you will lose your home and you will have to return the money you borrowed to your lender.

If you are in default on your mortgage or facing foreclosure, you may be targeted by a foreclosure rescue scam. The FTC wants you to know how to recognize the telltale signs and report them. If you are faced with foreclosure, the FTC says legitimate options are available to help you save your home.

Spotting a Scam

If you’re looking for foreclosure prevention help, avoid any business that:

• guarantees to stop the foreclosure process – no matter what your circumstances are
• instructs you not to contact your lender, lawyer or credit or housing counselor
• collects a fee before providing any services accepts payment only by cashier’s check or wire transfer
• encourages you to lease your home so you can buy it back over time
• recommends that you make your mortgage payments directly to it, rather than your lender
• urges you to transfer your property deed or title to it
• offers to buy your house for cash at a fixed price that is inappropriate for the housing market
• pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand.

Finding Legitimate Help

Housing experts say that when you’re behind on your mortgage payments, maintaining communication with your lender is the most important thing you can do. Contact your lender or servicer immediately if you’re having trouble paying your mortgage or you have received a foreclosure notice. You may be able to negotiate a new repayment schedule.

Call 1-888-995-HOPE for free personalized advice from housing counseling agencies certified by the U.S. Department of Housing and Urban Development (HUD). This national hotline – open 24/7 – is operated by the Homeownership Preservation Foundation, a nonprofit member of the HOPE NOW Alliance of mortgage industry members and HUD-certified counseling agencies. For free guidance online, visit www.hopenow.com. For free information on the President’s plan to help homeowners, visit www.makinghomeaffordable.gov.

To learn more about home mortgages and other credit-related issues, visit www.ftc.gov/ MoneyMatters. This site offers short, practical tips, videos, and links to reliable sources on a variety of topics from credit repair, debt collection, job hunting and job scams to vehicle repossession, managing mortgage payments and avoiding foreclosure rescue scams.

Reporting Fraud

If you think you’ve been dealing with a foreclosure fraudster, contact:

• Federal Trade Commission – www.ftc.gov
• Your state Attorney General – www.naag.org
• Your local Better Business Bureau – www.bbb.org

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

As reported by Stephanie Armour in USA Today, the next wave is poised to roll in, potentially undermining housing recovery efforts as more homes add to the glut of inventory and drive down prices.

These homes largely represent loans that are delinquent but have not yet resulted in foreclosure sales.

About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.

“There is a lot of foreclosed property in the pipeline that will hit the market and depress prices,” says Mark Zandi at Moody’s Economy.com. Foreclosed homes often sell at prices below those on the market and can therefore drag down overall home values.

Jumana Bauwens, a spokeswoman at Bank of America, says the bank is projecting an increase in foreclosures in part because customers will not be qualifying for existing loan-modification programs.

There is often a long lag time between a borrower going delinquent and the bank taking the home. Here’s why:

•Moratoriums. New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.

•Overwhelmed lenders. Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take longer to initiate a foreclosure sale.

•Modifications. Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.

•Asset write-downs. Banks may in part be waiting to liquidate homes through foreclosure because they don’t want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.

If you are looking to short sell your home make sure:

1. Your REALTOR and/or Loss Mitigation Company knows exactly how to “sell” your short sale to the bank using: BPOs, appraisals, insurance repair  estimates, letters of declining value, mortgage audits and REO comp matrixes.
2. You leverage State or Federal laws to back your lender/bank into a corner to force their hand and tell you exactly what they will take for your house.
3. If necessary, put your lender/bank over a barrel with a with highly focused lawsuit.

- The Bank Slayer

A mortgage audit is a forensic analysis of your Loan Application, the Good Faith Estimate, the Truth in Lending Statement, Note, Deed of Trust, HUD-1 closing statement and other documents to determine if there were errors or misrepresentations in the lending process.   Even a simple error in the APR or failure to meet the statutory date requirements can yield the leverage needed to win a mortgage rescission, a reduction in principal for a loan modification or add firepower to a short sale.

Even if you are current on your mortgage but wonder if you were the victim of predatory lending or if you have an adjustable rate mortgage which you want the bank to convert to a better fixed rate plan a mortgage audit is the start point for any battle plan.

Call our office at 713-595-8200 today and take advantage of the valuable and free offer for veterans.

- The Bank Slayer

“The theory is that the financing was based upon a questionable appraisal which the lender approved without proper oversight,” a RetroAppraisals.com release said.  “Mortgage brokers, real estate agents, and lenders had close contact with appraisers and most appraisal order forms had a line item that asked for the borrower or their agent to write down the value that was needed from the appraiser.”

When Lender’s counsel moves for Summary Judgment, introduction of a Historical Revised Real Estate Appraisal could cause Judges to take a hard look at any Holder in Due Course protection sought by the lender. An obvious reason is a higher court review of the irrefutable factual information contained in the appraisal, could cause such an opinion to be overturned.

Such Historical Review might be able to be used to allege collusion, collaboration, civil theft, and fraud in the inducement and common law fraud. The aforementioned can be a springboard for an attorney’s affirmative defenses and counterclaim for damages – depending upon the state’s rules of civil procedure and the attorney’s experience and creativity.

Steven Greene, co-founder of Retro Appraisals LLC, said in most cases, a look back at the facts using a retro appraisal puts just enough pressure on the bank or lender and their representatives to find solutions rather than face the consequences of their previous actions.

At Home Solution Counselors we completely agree.  In fact, we build a historical view of the value for every case where the Audit shows fishy values.    Bottom line is that a solid audit is critical to success in building a winning cases.

- The Bank Slayer