American Loan Audits
Forensic Loan Audits, Mortgage Compliance Audits
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To understand the results from your Forensic Audit, read the regulations that form your case against your mortgage lender. Below are links to the resources offered by U.S. Government agencies like FTC and HUD.

Common Mortgage Violations

Usually Enforced by State Laws

Constructive Fraud

Material facts such as the terms of the loan, if there's a prepayment penalty, or other information that a reasonable borrower would want to know before accepting the loan must be disclosed in an obvious manner. Did the anyone working for the broker or loan officer fail to disclose any material facts to the borrower?

Fraud and Negligent Misrepresentation,
False Advertising

Did any representations, statements, or comments (written or oral) by the broker, loan officer, notary or anyone else say anything different than the terms of the documents? If a mortgage professional gives wrong information which a reasonably diligent mortgage professional would not have given, he or she may have made a negligent misrepresentation.

Excessive Fees

We analyze the loan documents to look for Excessive Fees and Improper Charges by your Lender. We also look for Deceptive Abusive Predatory Lending Practices, Excessive Prepayment Penalties, lack of Tangible Benefits to the Borrower, Affordability to the Borrower, Home Mortgage Disclosure Act (HMDA) Data, Broker Fee Agreements, and State and Federal Disclosure Accuracy.

Breach of Contract

The mortgage documents and attachments form a contract. If the lender doesn't follow all the terms of the contract like how the interest is calculated, and the penalties it assesses, he breaches the contract. Are there anything in the contract which the lender failed to follow?

Breach of Fiduciary Duty

If the Lender also acts as Escrow, failure to complete Escrow Terms can be a Breach of Fiduciary Duty.

   

Federal Laws Governing Mortgage Lending

The United States Congress passed 4 basic laws to provide lender guidelines. Lenders are required to follow these rules, regulations and procedures when providing loan documents.
These rules, regulations and procedures are in the Real Estate Settlement Procedures Act (RESPA), the Truth In Lending Act (TILA), Equal Credit Opportunity Act (ECOA) and Fair Credit Reporting Act (FCRA).

Real Estate Settlement Procedures Act (RESPA)

The Real Estate Settlement Procedures Act (RESPA) requires lenders to give a "Good Faith Estimate" of all closing costs you are likely to pay within 3 days of receiving your application. The purpose is to help the borrower avoid paying "hidden" fees at closing, to allow the borrower to shop for a better loan before signing.
RESPA also requires that borrowers receive other disclosures at different times. Some disclosures itemize the costs of the loan, describe lender servicing and escrow account practices and outline business relationships with settlement service providers.

Read RESPA law

Truth In Lending Act (TILA)

The Truth In Lending Act (TILA) specified in Regulation Z, requires that the annual percentage rate (APR), the terms of the loan and the total costs be disclosed to a borrower at the beginning. This information is required to be conspicuous on documents given to the consumer before signing, and usually on billing statements.

Read TILA law

Equal Credit Opportunity Act (ECOA)

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending based on race, creed, religion, national origin, sex, marital status or age. It guarantees that all consumers are given an equal chance to obtain credit despite those factors. Other factors can affect credit evaluations, such as income, expenses, debt, and credit history.
The law applies to any creditor who regularly extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Anyone involved in extending this credit, such as real estate brokers who arrange financing, must obey this law.

Read ECOA law

Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) regulates the accuracy, fairness and privacy of information in the files of consumer reporting agencies. When you apply for a mortgage, the lender gets your credit report. The FCRA provides you access to that report.

Read FCRA law

More United States Government Online Resources
Fair Housing and Equal Opportunity (FHEO)
FTC - Mortgage Servicers: Their Responsibilities to You
FAQs About Escrow Accounts for Consumers
How to Avoid Foreclosure (HUD)
Guide to Avoiding Foreclosure
FTC - Mortgages/Real Estate
HOPE for Homeowners
HUD Approved Housing Counseling Agencies
List of Credit Counseling Agencies Approved

Remedies

1) Loan Modification: Many Borrowers give the Violation List to Loan Modifiers to get the Lender to Reform the Loan with better terms. If the Lender refuses, the Borrower may choose to hire a lawyer and go to court. Once a Loan is Modified, the Borrower can no longer sue.
2) 3 Year TILA Rescission: Some TILA violations can allow rescission for 3 years, with harsh penalties to the Lender. An APR that is grossly inaccurate, Finance Charges that are undisclosed, an inaccurate Notice of Right to Cancel, or failure to supply 2 copies of the Notice of Right to Cancel to each Borrower on Refinance are all grounds for Rescission.
3) 1 Year TILA Suit: Other TILA violations can be grounds for suit for 1 year after documents are signed.
4) State Rescission: Misrepresentation, Fraud, lack of Consideration can be reasons for Rescission in many States, based on State Laws.
5) Lawsuits: Any substantial violations can be ground to sue the Lender.
Borrowers should consult an attorney, to see which remedy is best.
Audits are well accepted in capital markets and with Wall Street firms. Loans audited can be more attractive to investors, especially those aware of assignee-liability, and have become well known to lawyers, and companies offering debt settlements, loan modifications, short sales and other negotiations.

Competitive Pricing

Many of our competitors price similar audits for $600 to $1,000.
Our prices are below that.

Purchase a Loan Audit here

We have special prices for attorney offices.
We can give great referral fees to other offices, but the client must buy the audit direct from us.
Call Jim at (562) 867-3230 or (at ) ,
for a FREE Evaluation for your Situation.
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