A minor mistake in your loan documents could stop foreclosure in its tracks.

Posted on November 9, 2008. Filed under: Foreclosure Defense, Mortgage Audit, Truth in Lending Act | Tags: , , , |

Homeowners facing foreclosure are now fighting back with a Forensic Mortgage Document Audit

WASHINGTON, DC- November 10, 2008 —National Loan Audits announced today that homeowners who are facing foreclosure and having difficulty negotiating a loan modification might want to obtain a Forensic Loan Document Audit to determine if their lender made any mistakes when the mortgage was issued. The federal Truth in Lending Act (TILA) covers loans secured by a borrower’s primary residence and a violation of TILA, regardless of how minor or technical in nature, can have major consequences for a lender.

Even a $35 miscalculation on the lender’s part could be an actionable offense under TILA allowing the borrower to rescind the loan and receive a refund of all closing costs and interest payments made since the inception of the loan. Thus the threat of a costly lawsuit is enough to persuade the lender to come to the negotiating table and find a way to help you work through your financial difficulties as opposed to pursuing foreclosure.

In a forensic loan review, a mortgage auditor scours your loan documents looking for errors in the truth-in-lending statement the lender provided on the day you signed your closing documents and the lender’s annual percentage rate, disclosed to you so you could have compared loan costs. The mortgage auditor also looks for excessive or undisclosed closing costs and missing or deficient state and federal disclosures including.

If the truth-in-lending statement doesn’t match the HUD-1 settlement statement you received at closing or if the APR is off by just an1/8 of a percentage point, you might have cause for legal action against the lender. To avoid getting caught in a costly law suit most lenders will eagerly negotiate a loan modification as opposed to fighting a legal battle they may lose.

Typically, forensic loan audits are only ordered by national banks and institutional mortgage investors prior to purchasing large pools of loans to determine what kind of legal liability they may be facing. But National Loan Audits, based in Rockville, Maryland, a Washington, DC suburb, is now offering comprehensive Loan Document Reviews to consumers and their attorneys as part of its efforts to help distressed homeowners facing foreclosure.

Dean Mostofi, the founder of National Loan Audits, a Forensic Loan Document Auditing and Mortgage Modification company, says the chances are excellent that, somewhere in a borrower’s tall stack of loan documents, they will find a violation. He states that well over 80% of the loan audits performed by his firm have revealed major Truth-in-Lending violations, which can be used as leverage when negotiating a loan modification with the lender.

“With over 60 pages of loan documents, there’s bound to be a mistake in there somewhere,” says Mostofi, “Maybe some pages were left blank or perhaps some of the language is misleading, or maybe there is a technical error.”

Mistakes by mortgage brokers and lenders were prevalent during the housing boom, when there was a rush to approve the application of anyone with a pulse. Now that the boom has gone bust, borrowers can use these errors to fight back and keep their homes. “Forensic mortgage document reviews have put a big spotlight on how the average home buyer was abused during the mortgage craze” added Mostofi.

National Loan Audits also performs loan document reviews for attorneys representing borrowers facing foreclosure. “It is far more cost efficient for law firms to send their audits to us as opposed to doing them in house” Mostofi noted. The average audit takes 7 days to complete and costs $495.00.

For more information contact:
Dean Mostofi

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3 Responses to “A minor mistake in your loan documents could stop foreclosure in its tracks.”

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After reviewing all documents, do you then forward them to the mortgage co. for their input and settlement? If so, what is your cost/commission, etc? Do you also renegotiate the loan?

Please contact us at 800-564-2764

I have the same question as the previous writer do you forward this to the mortgage co in my case it’s a servicing company (ASC) and does this also apply in Suffolk County, New York when I go before the judge in a foreclosure proceeding?

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