The Importance of a Forensic Mortgage Audit Before Litigation

By: Timothy McFarlin | Published: November 16th, 2010 | Category: Mortgage Litigation

It has become popular recently for companies to offer homeowners a “forensic loan audit” of their mortgage origination documents for a substantial fee. The way it is marketed represents to homeowners, upon presenting their lender with these “audit” results, the lender will immediately succumb to their mistakes and give the homeowner a favorable modification, principal reduction or some other form of damages. Well, these claims are flatly not true, and most (if not all) “forensic loan audit” companies do nothing to make homeowners better off.

“Forensic Loan Audits” will be Ignored by Your Lender

Homeowners have been threatening lenders with lawsuits since the beginning of time, the fact is, lenders simply ignore such threats and typically send a response to the homeowner that says, in a nutshell…we didn’t do anything wrong, your loan has no issues. I can tell you from experience that no matter how egregious the origination issues with the loan are, in 100% of the cases I’ve seen or been involved in, that is exactly the lenders response. At that point, once the lender denies they have done anything wrong, it is up to the homeowner to file their lawsuit and litigate the alleged origination issues. For this you’ll need an attorney.

“Forensic Loan Audit” Companies Can’t Litigate for You

Most of these forensic loan audit companies who charge enormous fees for their “service” are not attorneys and can not do anything for you even if they find issues with the loan. So the question becomes, what then do you do with your “forensic loan audit” results if no one is going to sue for you? Many people end up calling a real attorney, and often end up in my office. The problem most homeowners have is their loan was originated more than three years ago, and the loan origination rules (TILA, RESPA) have three year statute of limitations. So, no matter how badly or unlawfully the loan may have been originated, it’s too late to even file the lawsuit. The good news is, there are often other issues we can litigate if the homeowner desires a lawsuit against their lender.

Mortgage Litigation Attorneys

Unless your “forensic loan audit” company can litigate whatever claims they find, you are not getting any value there. Most law firms who do mortgage litigation, will look at your loan documents and evaluate your case for free, and of course, if you’d then like to sue your lender, we provide those services. McFarlin LLP mortgage litigation attorneys handle all aspects of mortgage litigation and can actually litigate any claims we find. We have offices in Irvine and Los Angeles and can represent homeowners throughout California. With a matter as important as foreclosure, it is critical to work with professionals who can actually help you. We’re available now, toll free, at (888) 728-0044.

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