Posted by: Catherine | February 28, 2010

California Attorney General says “Avoid Forensic Loan Audits”


California’s Attorney General Edmund Brown, has released a statement to avoid forensic loan audits.  The full content of the article is at his own website :  “Avoid Forensic Loan Audits , latest in phony foreclosure relief services.”

I have seen a few clients go in this direction, and in fact , literally a couple of years later are still “working on it” with no relief in site.  Yes, they’ve avoided foreclosure action with the threats of legal action, but ultimately it seems, the result may be the same.  Short Sale, or foreclosure. 

From the article:

In truth, there is no evidence or statistical data to support claims that forensic loan audits-even if performed by a licensed, legitimate and trained auditor, mortgage professional or lawyer-will help homeowners obtain loan modifications or provide any other foreclosure relief.

So as usual, beware.  If a firm is promising you big things, but asking for money up front – be wary!  I’m sure there are some stories of folks helped by an audit like this, but I’ve not personally heard of any.  If you were successful with an audit of this type, please share!   And if you are successful in getting a lender to “rescind” your loan because they used fraudulent or incomplete means to get you into it, then what?  Wouldn’t you have to qualify for a new loan?  And therein lies the problem – most are seeking this relief due to some hardship, so if you get out of one loan, and now with a year or more of missed payments, now what do you do? 

As part of today’s consumer alert, Brown offered the following tips to homeowners:

  • Don’t pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.
  • Don’t ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.
  • Don’t transfer title or sell your house to a “foreclosure rescuer.” Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It could also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict you and take your home.
  • Don’t pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
  • Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off their delinquent mortgage. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.

As AG Brown mentions, do not ignore the letters from your lender.  They will very often provide you help HUD counseling agency contact information inside.  They will help you FREE.  If a sale of your home is inevitable, perhaps as a short sale, a REALTOR will help you – FREE.  A REALTOR is only paid when the property sells and the banks will allow the real estate professionals to be paid through the escrow – no money out of your pocket. 

Here are some additional resources to help:

Also, have you checked to see if you are eligible for mortgage help?
http://www.makinghomeaffordable.gov

Need urgent help?
Contact the Homeowner’s HOPE™ Hotline:
(888) 995-HOPE

Publication from HUD: Avoiding Foreclosure

Early delinquency intervention – saving your home from foreclosure

Contact Catherine Myers for more information.
Windermere Bay Area Properties

925-683-2125
www.DiabloValley.net Contra Costa Short Sales, Homes for Sale, Resources

Serving the needs of homeowners in Walnut Creek, Concord, Clayton, Pleasant Hill, Martinez, Antioch, Brentwood, Pittsburg, Oakley and in all of Contra Costa.


Responses

  1. How do you know that the servicing lender actually has the legal authority to even collect your mortgage payments?

    How can you prove that your loan was securitized if you don’t do a forensic audit of your mortgage loan?

    How do you know that the chain of title wasn’t flawed when the note was securitized?

    Are you also going to claim that the ruling in the Landmark National Bank v. Kesler case by the Kansas Supreme Court is just your definition of a pipe dream?

    Why are Orange County, California judges acting like they are being paid off by the lenders to dismiss every single fraud claim brought before them against lenders?

    I have a real problem with attorney’s general giving any legal advice to a distressed homeowner because it’s always in favor of the lender.

  2. WARNING TO REALTORS AND BROKERS SELLING SHORT SALES:

    If it is found that the lender that ordered you to handle the short sale was not the true holder in due course, you do realize that you could go to jail for furtherance in a fraud scheme?

    Your legal problems are only just beginning with the wave of new cases that are forthcoming.

  3. Dave, I’ve never had a lender “order me” to handle a short sale. Sellers select their realtors, I’ve never had a lender select me. The seller still owns the house.


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