Educational Consumer Tips

Forensic Loan Audits

Author: Better Business Bureau
Published:

A forensic loan audit is touted as a precursor to the process of obtaining a real estate loan modification. A company will offer to perform an “audit” of a consumer’s loan documents to help them uncover any errors or potentially uncover a lender’s failure to comply with lending laws.

Forensic loan auditors claim the results of the audit will stop any pending foreclosure, or give the borrower the right to change the terms of the loan, be it a principal reduction, lower interest rate, or other modifications to the original loan agreement. The California Department of Real Estate (DRE) and Office of the Attorney General (AG) have not found the results of forensic loan audits to be as claimed by the auditing companies.

The DRE states “There is no statistical or other data that supports the claims that a forensic loan audit, even if performed by a licensed, legitimate and trained auditor will help you modify your home loan or ‘stop foreclosure in its tracks’.” The DRE also states it is critical to note that a loan audit has absolutely no value as a stand-alone document. The BBB has yet to find a consumer that has benefitted from this service and has successfully used a forensic loan audit to obtain a modification.

The BBB encourages you to research these companies with the BBB and AG’s office, prior to paying for a forensic loan audit. If you find yourself a victim of a fraudulent forensic loan audit company, you are encouraged to contact the DRE at (619) 525-4192 or online at http://www.dre.ca.gov/cons_complaint.html. You may also wish to notify the Attorney General’s Office at (800) 569-4287 or online at http://ag.ca.gov/consumers/general.php.

For further information about the forensic loan audit industry, you may find the following links useful:

http://www.dre.ca.gov/pdf_docs/ConsumerWarningForensicLoanAudits.pdf

http://ag.ca.gov/newsalerts/release.php?id=1862