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Negotiating a Loan Modification with your lender is not an easy task. We invariably feel we are at a disadvantage when dealing with a large corporation or wealthy investor. However, you might have more tools at your disposal than you think. This article looks into the power of forensic loan audits and how they can be used to create extra leverage for our loan modification application, or as the title states: to speak softly with a big stick.

The idea behind using a forensic mortgage loan document audit is to get lenders on your side, albeit with a little arm twisting. A forensic mortgage loan audit checks your loan documentation for any federal or state violations or errors. Evidence shows that most loan mortgages have significant violations. Once violations have been documented they can be used to take a lender to court and in some cases get the loan cancelled.

How do you carry out a forensic loan audit?

First, you need data to work with. You need all your loan documents. The process starts with a Qualified Written Request, a QWR. This is a formal request for copies of your loan documents. Your lender is required by law to produce these documents and pronto. The documents that are requested include:

-          An Initial Loan Application and Final Loan Application.

-          Deed of Trust

-          Truth in Lending Statements

-          Good Faith Estimates

-          Copy of Loan Payment History

-          Grant Deeds

-          Title Report

-          Itemization of Amount Financed

-          All fees incurred, escrow account disbursements and details on how payments were calculated.

The list goes on and should be as thorough as possible. The more documents you revise the more chances you have to find a violation in procedure.

Second, an audit must be carried out on your loan. There are many mistakes and violations that can be discovered by a forensic audit. These include violations to the Truth in Lending Act (TILA), usury violations, misleading disclosures, overstated home values, predatory lending, and lack of good faith estimate compliance, to mention just a few.

How does this help? If I violation is discovered, however serious you get leverage with your lender. If for instance you are overcharged, even by a small amount, or the annual percentage rate (APR) is a fraction higher than what you were told, your lender could be in breach of the Truth in Lending Act. This will make your lender feel much more motivated to giving you a beneficial loan modification.

Carrying out a forensic loan audit is not a simple task. Unless you have experience in loan modifications and Real Estate law you are probably better off contracting the services of a lawyer. This will of course cost money, but the return on your investment could be well worth it if it helps you get the loan modification you need.

Related posts:

1. Loan Modifications and Forensic Loan Audits, Speak Softly with a Big Stick
2. Forensic Loan Auditing: How To Get Leverage On Your Loan Modification
3. Loan Modification Help: Get Your Loan Modification Approved

Related posts:

1. Loan Modifications and Forensic Loan Audits, Speak Softly with a Big Stick
2. Forensic Loan Auditing: How To Get Leverage On Your Loan Modification
3. Loan Modification Help: Get Your Loan Modification Approved

Negotiating a Loan Modification with your lender is not an easy task. We invariably feel we are at a disadvantage when dealing with a large corporation or wealthy investor. However, you might have more tools at your disposal than you think. This article looks into the power of forensic loan audits and how they can be used to create extra leverage for our loan modification application, or as the title states: to speak softly with a big stick.

The idea behind using a forensic mortgage loan document audit is to get lenders on your side, albeit with a little arm twisting. A forensic mortgage loan audit checks your loan documentation for any federal or state violations or errors. Evidence shows that most loan mortgages have significant violations. Once violations have been documented they can be used to take a lender to court and in some cases get the loan cancelled.

How do you carry out a forensic loan audit?

First, you need data to work with. You need all your loan documents. The process starts with a Qualified Written Request, a QWR. This is a formal request for copies of your loan documents. Your lender is required by law to produce these documents and pronto. The documents that are requested include:

-          An Initial Loan Application and Final Loan Application.

-          Deed of Trust

-          Truth in Lending Statements

-          Good Faith Estimates

-          Copy of Loan Payment History

-          Grant Deeds

-          Title Report

-          Itemization of Amount Financed

-          All fees incurred, escrow account disbursements and details on how payments were calculated.

The list goes on and should be as thorough as possible. The more documents you revise the more chances you have to find a violation in procedure.

Second, an audit must be carried out on your loan. There are many mistakes and violations that can be discovered by a forensic audit. These include violations to the Truth in Lending Act (TILA), usury violations, misleading disclosures, overstated home values, predatory lending, and lack of good faith estimate compliance, to mention just a few.

How does this help? If I violation is discovered, however serious you get leverage with your lender. If for instance you are overcharged, even by a small amount, or the annual percentage rate (APR) is a fraction higher than what you were told, your lender could be in breach of the Truth in Lending Act. This will make your lender feel much more motivated to giving you a beneficial loan modification.

Carrying out a forensic loan audit is not a simple task. Unless you have experience in loan modifications and Real Estate law you are probably better off contracting the services of a lawyer. This will of course cost money, but the return on your investment could be well worth it if it helps you get the loan modification you need.

Related posts:

1. Forensic Loan Auditing: How To Get Leverage On Your Loan Modification
2. Loan Modification Help: Get Your Loan Modification Approved
3. Loan Modifications No Match For Rising US Foreclosures.

Related posts:

1. Forensic Loan Auditing: How To Get Leverage On Your Loan Modification
2. Loan Modification Help: Get Your Loan Modification Approved
3. Loan Modifications No Match For Rising US Foreclosures.

A balloon mortgage is one in which monthly payments are made for a pre-determined period of time, with the balance of the loan paid in full at the end of the loan term. Like an ARM, interest rates on a balloon mortgage are typically lower than on a fixed rate mortgage and this makes the monthly payments on a this type of mortgage are very low and affordable. Balloon mortgage loans are calculated to amortize over a longer period than the due date of the balloon. A balloon, or lump sum, payment is required at the maturity of the loan to completely pay off the remaining principal. Therefore its important to keep in mind that the terms on a balloon mortgage are insufficient to completely amortize the loan.

Balloon mortgages can, and often do, contain a contractual opportunity to refinance at prevailing rates when the balloon payment is due. If the balloon mortgage loan has the option to be refinanced when the initial period expires, it will be called a convertible balloon mortgage. Some balloon mortgages come with “reset” clauses that provide for the original lender to reset the loan terms so that the loan is fully paid off in the remaining twenty three to twenty five years. The advantage of a balloon loan with a reset is that the loan payment will remain constant for the remaining life of the mortgage. The disadvantage is that the borrower is subject to the then current rates. If you are unable to convert or refinance the balloon mortgage, you may be forced to sell your home to make the loan whole. However, for the initial period of the loan, the interest rates on a balloon mortgage are usually a little lower than a comparable Adjustable Rate Mortgage.

Alternatively, with a fixed-rate mortgage you’ll have the benefit of knowing exactly what your monthly payments will be for the entire term of the loan. Because few people have the funds to fully pay off the balance due at the end of the balloon term, when using a balloon mortgage as the instrument of financing, the borrower should be concerned about future interest rates because they will be subject to them when the loan matures. However, most people that take out balloon mortgages assume that they’ll be moving within the term of the balloon period or that they will be eligible for a more attractive loan at the end of that period. Many people also use balloon mortgages to get that larger dream house. This strategy can, in fact, be fairly risky and a borrower should consider the market risk against the benefit of a larger home. Again, at the end of that period, the borrower must pay off the loan in full – this is the “balloon” payment. For example, a 7 year balloon calculated to amortize over 30 years will have low payments for 7 years and then the remaining balance will be due.

Before borrowing it’s important to consider whether you already have too much debt, whether you will be able to service the debt if you refinance at the end of the balloon period (or pay the balance), the risks associated with the current real estate market, and other factors as well. While it can be fairly easy to make the monthly payments on a balloon mortgage, it is very important to consider that there could be difficulty in managing the terms of the loan once it matures. In the current climate, fixed-rate mortgages are definitely the “loan of choice” for homeowners seeking a refinance mortgage, but if all the factors are considered and risks weighed, a balloon mortgage can be a viable alternative. Loan programs vary depending on the borrower’s credit, closing costs vary from state to state, work with your loan officer to get a proper estimate when you apply for your loan.