Homeowners trying to stop home foreclosures should decidedly brush aside offers of foreclosure prevention help that focus on mortgage loan audits because these are new ways crafted by deceitful people to take advantage of the vulnerability of distressed borrowers.
Mortgage loan audits, oftentimes marketed as forensic loan audits, are supposedly examination of mortgage loan documents to identify violations of mortgage lending laws by the lenders. Unscrupulous mortgage consultants sell this idea to distressed borrowers, telling them that the lenders will more easily agree to loan modifications if they are presented with their lending law violations.
In reality, however, there has been no data or evidence to back the claim that mortgage loan audits can pressure lenders to speed up their loan modification efforts for borrowers who present possible violations of federal laws in their mortgage origination.
According to the office of California Attorney General Edmund Brown Jr., the for-profit foreclosure prevention industry continues to find creative ways to swindle money from desperate borrowers.
According to legitimate consultants, even if the mortgage loan audits are performed by licensed and trained auditors, lawyers or mortgage professionals, forensic loan audits are not sure-fire or guaranteed tools to stop home foreclosures.
The Mortgage Relief Law Center in California is one of the many foreclosure-relief companies marketing forensic loan audits to homeowners at risk of foreclosure. One mortgage borrower complained that he paid $2,795 to MLRC, which accepted the money but never updated him on the mortgage modification process and never informed him that he was not qualified for modification.
The borrower claimed that he came to know of his modification status only after his lender sent him a notification stating that he was not qualified for loan modification. He also claimed that MLRC refused to refund his money.
Under the law in California, all foreclosure relief consultants and loan modification professionals are required to register with the office of Attorney General Brown and post a bond of $100,000. They are also prohibited from collecting upfront payments.
Last year, California officials have investigated over 2,000 loan modification complaints and have sued almost 350 people involved in fraudulent foreclosure relief activities.
The office of Brown has issued advisories to homeowners looking for consultants to help them stop home foreclosures. Homeowners are advised not to pay upfront fees, not to transfer titles or pay mortgage payments to consultants and not to ignore letters from mortgage servicers and lenders.