The real secret to getting your loan modification approved and stopping foreclosure is to perform a forensic loan audit on your closing package. A forensic loan investigation is conducted to determine if your lender has committed fraud on 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 packet that was signed at closing when the loan was first obtained. This application alone can be used as a stalling 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 servicers make when filing foreclosure against homeowners is that they often file under the institution’s name when they don’t even own the mortgage or promissory note. Legally, the only one who can foreclose is the one with the note. When Ginnie Maes were the wonders of Wall Street, investors bought and sold mortgage-backed securities multiple times and raised billions of dollars in mortgages and sold them to pension funds and mutual funds, as well as many other types of investors. Where this becomes a problem is that banks or servicers often have no 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 you to present the original promissory note that was signed at closing. Many times, banks do not even have the promissory note, as it has been sold and transferred so many times. According to a ruling by federal judge Christopher Boyko of the U.S. District Court in Ohio, many foreclosures cannot continue because the actual owners of the loans are not the lenders who originally issued the loans, even though the names of the original banknote holders continue to appear in official records.

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

The numerical goal of the forensic mortgage audit is to determine whether there were violations of federal law. If these violations are found, the borrower may be eligible for full predatory loan relief or a very favorable loan modification. Total relief from the predatory mortgage is called “loan termination.”

At the termination of a loan, the lender recovers the “predatory loan” and credits the borrower with all interest made on the payments, including origination or discount fees. If the cancellation of the loan is not justified, 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 their home and is given a low interest rate and possible capital production while the bank has a loan on its books.

An estimated 85% of all loans originated during the mortgage boom years of 2000-2006 were written and financed 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 forensic investigation. These forensic investigations can help you keep your home and get conditions you can afford.