Thursday, August 16, 2012

Why Forensic Loan Audits Are Necessary

Lending practice laws were very lenient during the years 2000 2007. During that time numerous home loans were signed containing violations in unnoticed loan terms. This resulted in borrowers struggling to stay on top of their home loan obligations.

Most homeowners are aware of the lending laws and their definitions. In good faith, homeowners trust their lenders to be honest about their business practices, unaware of violations these lenders could insert in their home loan terms. These borrowers are simply seeking the professional help the lender "seems" to be providing for them and therefore signs any documents provided by the real estate agent or lender.

The problem would then remain unnoticed in the first few months. As the months passed, the difficulties of paying the loan become worse. Eventually, it may get to the point that a homeowner can no longer handle their mortgage. In this case, they might ask their lender for assistance on how to manage their overbearing loan. A home loan modification may be considered in order to ease the burden of their current loan terms. Unfortunately, the lender does not always cooperate and may deny the modification.

This is when a forensic loan audit becomes the homeowner's only option for saving their home.

Any borrowers who faced the same scenario described above can be assisted by a forensic loan audit. During a forensic loan audit, an investigator will review all the loan documents and check for violations made by the lender. If there are misrepresentations, misleading clauses, or missing documents, they can be used against the lender.

Banks, lenders, and credit unions understand the severity of being proven guilty of these violations. The impact on lenders could extend so far as to end their business enterprise with just one case of a bad home loan. If the lender is proven guilty is it not likely for them to refuse the request to modify the loan terms.

It is advisable to remain cautious during this process, because the lender may be proven not guilty. Therefore, it is important to seek the legal assistance of a professional.

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