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So tell me about loan Audits?

Profile picture for Bretzke
Real Estate Agent

View my 3 listings

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Since July 2009

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May 01 - US
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A Loan Audit runs your original mortgage paperwork though advanced software that attempts to find violations in Federal, State local, zoning and other laws. If a discrepancy is found, you can have an attorney issue a 'Qualified Written Request' to the bank demanding that they answer for their violations. There are cases in which a bank will modify rather than pursue litigation.
We had an example of a loan audit in our company where we found a $700000 discrepancy on a million dollar's house's interest, and in order to settle the bank offered the client a 2% rate over 40 years. There are errors in 80% of all mortgages written.
That is not to say the bank will do anything. They may come back with a 'so what?' However if your investment property is so underwater that you are willing to let it go, a loan audit is a last resort for saving aspects of your portfolio.
For my clients I do an evaluation and soft check for free. If you decide to go the loan audit route have these papers ready for your rep:
1. HUD closing statement
2. Truth in Lending
3. The mortgage statement, notes and all riders
4. A good faith estimate from the time of purchase. I hope that pretty much explains it but feel free to contact me if you want elaboration. Good Luck :)
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May 04
Profile picture for CA UMB
Contributions: 2943
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Since January 2009

Dan,

If you also do FHA, form a seperate Corporation for just your FHA Loan Originations. That will cut your audit expense expotenially! .... None are enjoyable! .... Rudi
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May 01
Profile picture for Rob Cochems
Mortgage Lender

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It is fantastic.

Just for the luxury of receiving an audit from Washington state, you get the great honor of paying for their airfare to come and catch up on old times.
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May 01
Profile picture for Colorado Mtg Broker
Mortgage Lender

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Since November 2009

They suck.
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May 01
 

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