Real Estate

Tricks to Get Approved for a Loan Modification and Stop Foreclosure

The real secret to getting your loan modification approved and stopping foreclosure is to perform a forensic loan audit in your settlement package. A forensic investigation of the loan is conducted to determine if your lender has committed fraud with your loan. These loan investigations review your file to determine if your lenders violated any of the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) and may entitle you to a better loan modification.

The forensic loan audit process begins with a written RESPA request and requires your lender to provide you with a copy of the closing package that was signed at closing when the loan was first obtained. This request alone can be used as a deadlock tactic to further delay the foreclosure process and give you leverage to use against your lender when seeking a loan modification.

One of the biggest mistakes lenders and servicing companies make when foreclosing homeowners is that they often file under the institution’s name when they may not even own the mortgage or the pay. Legally, the only one who can execute is the one with the note. When Ginnie Maes was the wonder of Wall Street, investors bought and sold mortgage-backed securities multiple times, raising billions of dollars in mortgages and selling them to pension funds and mutual funds, as well as many other types of investors. Where this becomes a problem is that many times the banks or servicers do not have the slightest idea where the original mortgage and promissory note are.

Another legal tactic to stop the foreclosure process is to go to court and demand that the lender validate that the debt is legal by asking the lender to produce the original note that was signed at closing. Many times, the banks don’t even have the bill as it has been sold and transferred so many times. According to a ruling by Federal Judge Christopher Boyko of the US District Court in Ohio, many foreclosures cannot proceed because the actual owners of the loans are not the lenders who originally issued the loans, even though the names of the original holders of the promissory notes continue to appear in official documents. records.

Before someone can lose their home to foreclosure, the plaintiff must prove that they actually own the note. In more than a dozen Ohio foreclosure cases, Deutsche Bank said it owned multiple notes and mortgages, and Judge Boyko found in each case that the documentation actually identified the original lenders as the owners of the loan and said nothing about Deutsche Bank and had no legal grounds to foreclose because they did not own the loans or have any authority to foreclose.

The number one objective of the forensic mortgage audit is to determine if there were violations of federal law. If these violations are found, the borrower may be eligible for full predatory loan relief or a highly favorable loan modification. Complete predatory mortgage relief is called “loan termination.”

In a loan termination, the lender repossesses the “predatory loan” and credits the borrower with all interest made on the payments, including any origination or discount fees. If termination of the loan is not warranted, the next best option is to discuss the loan with your lender and fight for a substantial loan modification based on legal violations of the loan. In these cases, everyone wins because the homeowner keeps his or her home and receives a low interest rate and possible equity production while the bank has a paying loan on its books.

An estimated 85% of all loans originated during the 2000-2006 mortgage boom years were signed and funded so quickly that many lenders made fatal errors in their documents. The bottom line is that if you are facing foreclosure or having difficulty paying your mortgage, insist on a forensic mortgage investigation. These forensic investigations can help you keep your home and get terms you can afford.

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