Using Forensic Audits in the Client’s Favor
Forensic audits occur when a professional such as an attorney looks through loan papers to find mistakes or violations. This can be requested by the borrower to give them leverage when they want a modification. Between 2001 and 2008, over three quarters of the loans that were made had violations in them that were actually considered to be part of predatory lending. When the borrowers of these loans went to receive a modification, in the cases that they weren’t aware of the violations, they weren’t necessarily given a good modification if they were given one at all. For those individuals that went into the loan modification process knowing about a violation, they did very well with the negotiations and even received a large reduction in the principle.
Banks usually do their own audits now – at least the ones that are more concerned about violations – but sometimes there are terms that can be caught. Anyone who has had a loan especially between 2001 and 2008 that need help with their loans and are looking to a modification as the solution may want to consider having a forensic audit completed on their file. If there is a mistake caught, even if it is an accidental one, it can be used to the client’s benefit. If not then the client is still able to apply for a modification they just won’t have as much leverage against the lender.
There is software available that can perform these audits but it is still recommended to have a person complete it because there is nothing better than the human eye for catching such mistakes. Fees vary for these services and one does have to be careful with whom they hire but when they hire the right person, that leverage that they really need may just be found.
