A forensic mortgage audit is a comprehensive review of mortgage documents and is usually carried out by a professional mortgage auditor. The purpose of a forensic mortgage audit is to uncover any discrepancies on the loan, including violations of the Federal Truth in Lending Act. Auditing mortgage documents can stop a foreclosure in process. In order to carry out a proper audit, you should be well versed with rules and regulations surrounding the mortgage process.
Inspect the mortgage documents to make sure all of the relevant documents are contained in the file. For example, the file should contain the application, an income and debt report, a credit report and a signed loan note. Your company should have a checklist to help you with this process, ensuring you don't miss any important documents.
Examine each document to make sure it is complete and truthful. For example, compare wage and income statements with the amounts the mortgagee stated on the application, or compare the interest rate stated on the application with the interest rate stated on the closing documents. Look for any missing or erroneous information.
Inspect the documents to ensure they comply with the Federal Truth in Lending Act. For example, the TILA requires that the annual percentage rate be disclosed to buyers and that adjustable rate mortgage disclosures and calculations are correct.
Study the documents for reasonableness. For example, if a house was appraised at $100,000 but the mortgagee obtained a loan for $105,000, that may warrant further inspection.
Check that the mortgagee was given the same mortgage that she actually applied for in the loan application. For example, make a note if a borrower applied for a fixed-rate loan but was given an adjustable-rate mortgage instead.
Analyze the documents to find out if the borrower was overcharged for closing costs or brokerage fees.
If you are in foreclosure, seek a forensic mortgage audit as soon as possible. The law only gives you a limited amount of time to challenge a loan and seek litigation.
Stephanie Ellen teaches mathematics and statistics at the university and college level. She coauthored a statistics textbook published by Houghton-Mifflin. She has been writing professionally since 2008. Ellen holds a Bachelor of Science in health science from State University New York, a master's degree in math education from Jacksonville University and a Master of Arts in creative writing from National University.