New Twist on Mortgage Fraud

By Carol A. Kando-Pineda, guest blogger

The latest mortgage relief scam to exploit financially strapped homeowners involves forensic mortgage loan audits. In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors, mortgage loan auditors or foreclosure prevention auditors backed by forensic attorneys offer to review a homeowner’s mortgage loan documents to determine whether the lender complied with state and federal mortgage lending laws. The “auditors” say their audit reports can help homeowners avoid foreclosure, accelerate the loan modification process, reduce their loan principal — or even cancel their loan.

But there is no evidence that forensic loan audits help homeowners get a loan modification or any other foreclosure relief, even if the audit is conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.

The FTC says that if you’re a homeowner in search of foreclosure prevention help, avoid any business that:

  • guarantees to stop the foreclosure process regardless of the circumstances
  • instructs you not to contact your lender, lawyer or credit or housing counselor
  • accepts payment only by cashier’s check or wire transfer
  • encourages you to lease your home so you can buy it back over time
  • recommends that you make your mortgage payments directly to it, rather than your lender
  • urges you to transfer your property deed or title to it
  • offers to buy your house for cash at a fixed price that is inappropriate for the housing market
  • pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand.

Housing experts say that when you get behind on your mortgage payments, maintaining communication with your lender is the most important thing you can do. If you’re having trouble paying your mortgage — or if you’ve received a foreclosure notice –contact your lender or servicer immediately. They may be able to negotiate a new repayment schedule.

For more information, read Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud at ftc.gov.

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  • http://www.houserefinancecenter.com Laura Morton

    Just a different hand picking the pockets of desperate homeowners. Loan auditors can not guarantee you anything. They are looking for errors in the Good Faith Estimate. Anything that would be a TILA violation. This is a long shot.