Forensic Loan Audits Don't Guarantee Refinance Deals

Posted by  on Apr 06, 2010

You're trying to squeeze a few extra dollars from this tight economy, just like the rest of us. Maybe you get an e-mail or see an ad on television for a neighborhood professional who promises you the kind of refinance deal you haven't been able to get from your current lender by suggesting a "forensic loan audit."

The name makes it sound like Gil Grissom is going to pore over the corpse of your home loan, hunting for "gotcha" clauses that your lender should never have entered in the first place. A positive forensic loan audit earns you an automatic refinance and a slot in the government's latest round of guaranteed mortgage loan modifications.

Except, it's a scam.

Avoiding Mortgage Refinance Scams

California Attorney General Jerry Brown has taken the lead in warning his state's residents about this latest form of mortgage loan fraud. With consumers getting wise to "foreclosure rescue" scams and sketchy refinance brokers, scammers have been forced to up their game. A clever "auditor" can convince you to hand them the equivalent of a mortgage payment, building your hopes that you can reset your loan or even get some cash back from a refinance. Worst of all, many of these grifters aren't even breaking any laws.

Here's why. Forensic loan audits have a legitimate place in professional accounting, because they very rarely find anything wrong with a properly executed mortgage loan. Scammers using this tactic can do one of two things: they can conduct a professional, thorough audit that happens to find nothing wrong with your mortgage loan. Or, they can simply cut right to the part where they just tell you that your situation doesn't qualify for a mandatory modification. Looking at the fine print, they're getting paid to produce the report, not to guarantee you a refinance deal.

Instead of hiring someone to find a quick fix or paying a guru to let you in on the "secrets mortgage brokers don't want you to know," just talk to your lender. Very few of the mortgage loan professionals I know want to take any of their customers to foreclosure. It's a painful, expensive, slow process that can cost banks tens of thousands of dollars. Shopping for mortgage quotes can help you build connections to talented mortgage brokers who can help you, even if your current bank can't.

And you won't have to lose any money over broken promises.


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