Document Review How?
For best evaluation of your claim on any of the predatory lending violations, it is necessary to do a loan audit. A loan audit is a good thing: but by who? Too many claims an expertise in this field of art. It is bit mathematics, and a bit law. But definitely not a forensic science which they label. Are they graduate of some forensic science laboratory? Forensic my foot. Too many of them are fraudster and former loan officers who spread this mess in the first place. Check their resume, they are loan officer who were actually wolves, and now working in sheep’s clothing. I get calls every day from these folks who had paid hefty money for a loan forensic audit. They want me to sue based on these violations and audit. I laugh on the notion of suing the lenders. All federal laws including TILA and RESPA has a very narrow statutory period of limitation. In RESPA cases, it is mostly one year statute of limitations, and in cases of TILA, the rescission can be extended to 3 years period. Now, these fancy loan audits are nothing but glorified computerized printout, which these folks reprint again and again with some name and other data changes. Again, I they find violations or minor inaccuracies, they would have hard time convincing any attorney to file a lawsuit. Lawsuits are very expensive and just cannot be filed based on whims or just computerized printout. They are based on investigations, hard core data, and other meritorious reasons. Remember Rule 11 of Federal Rules of Civil Procedure and other corresponding rules in state civil procedure code. An attorney is responsible for filing a non meritorious case which can trigger his malpractice insurance. Again, is the party going to pay the attorney for filing a lawsuit, or just intends to hire him on contingency basis.
Fortunately, we do not vouch for any speciality in this unlike lots of others despite having a strong background in loans, mortgages, real estate and other allied fields. Most of them have actually no expertise in it. Truthfully, even if they find anything, any sort of violations of any of the predatory lending laws, what exactly they can do? They are not licensed to litigate or practice law. They still have to find an attorney willing and knowledgeable in this filed which again is very complex, to litigate and eventually win. Your loan audit, or so called forensic auditor cannot do that. He would charge a hefty sum of $900 or more and give you a computerized printout which may be more than half wrong, and half just assumptions which can be wrong or not.
In order to properly evaluate a claim for mortgage litigation, it will become necessary to do audit on your closing documents for violations of state and federal lending laws. We can audit your loan documents well before suit is filed to give us the best chance at settlement prior to going to court. We can ask your lender to simply change the terms of your loans based on these violations, and they would listen because it is backed up with the force of an attorney. When attorney talks, everyone listen–because they mean business, and of course litigations which is very expensive for all the parties. Many lenders will agree to make changes to your loan. I have seen it many time a far better reduction of interest rate compared to what lender was willing to do initially.
Now let us get back to “doing your own loan forensic audit” of no cost to you.
What documents do you need?
In most cases you can get all of the information you need from the following five or six loan documents:
Truth in Lending Disclosure Statement
–(3-Day) Notice of Right to Cancel
–HUD-1 (or HUD-1A) Settlement Statement
–Mortgage and Note (with any riders or attachments)
–Uniform Residential Loan Application
–HOEPA (or “Section 32”) Notice (if lender treated loan as a HOEPA loan)
What we look for?
Violations of the following federal and state laws may entitle the borrower to a reduction in the amount they owe on a refinance or home equity loan.
–Truth in Lending Act (TILA):
–Does the TILA Disclosure Statement clearly and conspicuously display each of the following?
–Annual Percentage Rate (APR)
–Total of Payments
–Total of Payments
–Are the disclosures accurate given an independent analysis of the charges?
–Amount Financed (i.e., do we think the lender left out something)
–Did the borrower receive a proper (3-Day)Notice of Right to Cancel?
–Does this loan qualify for Home Ownership and Equity Protection Act protection?
–Real Estate Settlement Procedures Act (RESPA):
–Yield-spread premium (YSP) paid to broker (listed on HUD-1)
–Separate broker fee listed
Is three times the YSP enough to offset the amount the borrower was in default when sued?
–Equal Credit Opportunity Act (ECOA):
–Loan application sets forth requested terms (interest rate, loan amount, fixed-rate)
–No written counter-offer (within 30 days) to terms requested
–Loan includes terms worse than those requested in loan application
More Violations in our next meeting.