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Homeowners Fight Back With Mortgage Audits

I was listening to a talk radio show a couple of weeks ago and heard an ad for a company offering consumers the service of auditing their mortgage.  I was not aware of such a practice so I became curious.  A Google search for "mortgage audit" brings up nearly 100,000 results.  Mortgage auditing firms will put your mortgage under a microscope to look for deficiencies such as incomplete documentation and/or legal disclosure, failure to accurately account for your payments and interest charges, and if the mortgage was recorded properly and if sold transferred correctly.


Why Get A Mortgage Audit?

These companies claim that they almost always find errors.  Some even offer a refund if they don't find any issues with your mortgage.  The idea is that you may significantly strengthen your position in any negotiations you are having with your bank if you can demonstrate that your mortgage transaction was somehow flawed.

What Critics Say

Critics of mortgage audit firms agree that these firms do find errors but contend that most of the errors are not significant enough to stop a foreclosure.   One website critical of mortgage audits offered this advice, "If you have not been making your payments on time don't expect a mortgage audit to save you from losing your home."

Can You Stop Foreclosure With A Technicality?

Take a look at this video below which outlines what is becoming a very popular legal strategy called "Produce The Note."


Mortgage audit firms say that the recent scandals involving so called "robo-signers", lost paperwork, improper transfers of mortgages to investment pools  (called securitization), all open the door to a myriad of irregularities that can be uncovered in a mortgage audit.


 Do I Recommend Getting A Mortgage Audit?

The cost of a mortgage audit can be as low as $99 to as much as several hundred dollars.  I would probably agree with the idea that if you are several months behind on your mortgage this will likely not be a get out of jail card.  On the other hand, if you have been on time with your payments and have had no success getting a loan modification, this may be a great bargaining chip.  It appears that the most irregularities are being found in the so called 'subprime' mortgage market.  These are mortgages where very low down payments were involved and carried above average interest rates. They also were adjustable rate mortgages that could begin adjusting upward after two to three years.

If you are someone that has a respectable payment record but have found your bank to be unreasonable in working with you this may be a worthwhile option.  It may also be for you if you have become aware of irregularities such as confusion over who owns your mortgage note after it has been repeatedly sold.  Additionally, those with subprime mortgages would likely stand the greatest chance of a significant enough irregularity being found that it could be meaningful.  In the end, however, this may or may not ultimately solve your mortgage dilemma.   As a result, I would only employ this as a last resort if your bank is unwilling to negotiate with you in good faith.

If you have had a mortgage audit done, please use the comments section below to share your own experience.

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James L. Paris
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