The Next Wave of Fraud – the Loan Audit
First, liar loans, then foreclosure rescue and mortgage modification. Is loan audit the next wave of fraud?
Palm Coast, FL – October 12, 2009 – There is a minority among us that does not hesitate to take advantage of others. During the boom, they originated "subprime loans" to people who could never pay them back. When the housing boom became a bust, they morphed into "foreclosure rescue" and "loan modification" companies, often operating out of the same physical address from which they originated mortgages. "Loan audits" could become the next fraud wave, according to a statement (OfficialWire) issued Oct 8 by Storm Bradford, CEO of Mortgage Fraud Examiners.
When the mortgage crisis hit American homeowners full-force, companies offering "foreclosure rescue" and "loan modification" sprouted like weeds. While a few of these companies were legitimate, most promised troubled homeowners quick-fixes for high fees, and failed to deliver after collecting their money, leaving families poorer and closer to homelessness.
Now that federal and state law enforcement agencies have begun to crack down on "foreclosure rescue and "loan modification" scams, the hucksters have found a new snake-oil to peddle: "loan audits," warns Bradford. The new flood of loan audit companies is fueled by the spread of loan modification companies in an attempt to side-step the upfront fees that the states have prohibited these companies from charging. They’re the proverbial "wolf in sheep’s clothing."
Those facing foreclosure crave a viable alternative. The lure of being able to get out of their loan sounds appealing, especially with news that some lenders are having a hard time defending their right to foreclose. (See story)
While loan audits may be valuable, many companies offering them are not qualified to do so. A 10-minute software audit or untrained auditor is not as likely to find flaws in loan documentation that an experience attorney would find. Bradford adds, "Above all else, I think I would advise the layperson to avoid dealing with loan audit firms altogether. When you have a legal problem, see an attorney. There are many legal options available to homeowners facing foreclosure," Bradford continues. "But there are no shortcuts to finding them. Every claim has unique facts."
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Loan Audits
I still amazes me that people will pay hug sums of money to be helped with their problems. Almost all attorneys in this area of law offer a free consultation. Most consumer attorneys would be able to tell if there are violations during this free consultation. People need to know that almost all of these outfits are operating illegally, by collecting up front fees. Unfortunately, even if the attorney general gets involved, the money is long gone and never will be recovered.
Full disclosure: I am an attorney practicing in foreclsoure defense, bankruptcy, and other consumer issues.
But please, whether you come see me or not, go to an attorney that offers a free consultation to give you options for your mortgage issues.
Lewis Roberts