Forensic loan audits - A new type of loan modification scam
Forensic loan audits - A new type of loan modification scam
Forensic loan audits are the latest variation of loan modification scams. California Department of Real Estate and the State Bar of California have warned homeowners to avoid such scams because these loan audits offer no help towards saving their home from foreclosure.
What is forensic loan audit all about?
In this scam, the homeowners are made to believe that will be able to find errors, improper documentation, or outright illegal activity in the way their lender has originated their mortgage. Thus, the homeowners will have sufficient proof and documentation to challenge the lender and get assistance from him. The companies offering such services would “only” charge an upfront fee. The advertisement related to these scams can be found in the newspaper, radio and television. However, experts are of the opinion that the audits provide no benefit. Moreover, the foreclosure consultants are not allowed by law to collect upfront money for the services that they provide.
Does legitimate forensic audit provide any help?
Forensic loan audits, along with loan modification consultants try to cash in on the fear and desperation of the property owners who are facing foreclosure. There is no statistical evidence to support such claims. This is even true for those forensic auditors who are a licensed, legitimate and trained.
Thus, if you’re facing foreclosure, then your best option would be to contact your lender immediately and apply for a loan modification. Depending upon your financial situation, it is your lender who would help you know whether or not you qualify for any assistance. Your lender will offer you better help than these scam artists.
March 5th, 2010 at 3:25 am
Thanks for this piece of info. Recently, I found such an ad in our local newspaper and was just giving a thought whether or not to go for it. But after what I read here, I’m sure, I would not go for such a service.
March 5th, 2010 at 9:47 am
Brian, I appreciate the news, but I wish you had gone into more detail. If you’d quoted from the California Department of Real Estate’s press release, perhaps; that would have created a greater impact. Also, you mention at one point that “experts” feel that the forensic audits “provide no benefit.” That’s just too vague for my tastes.
I recently spoke with a local mortgage loan officer who has joined up with one of these firms. There’s a hefty referral fee for him with each borrower he refers to the law firm that runs the audits. Of course, the borrower has to pony up over $2000 just to get started (non-refundable, of course).
I didn’t like the sound of the overall deal - too dicey for me - so I never followed through. Since it’s based in California, I guess I’d have to say I’m glad things worked out the way they did.