How to Avoid Being Scammed: 3 Things to Look for in a Mortgage Auditor (Besides Qualifications)

Yesterday I wrote a post called “What is a Legitimate Loan Audit” which talked about how a loan audit or investigation should be conducted.

Now that you know how it should be done, how do you apply that information?

What should you look for in a potential auditor?

If you are a homeowner, here are some things to consider in evaluating someone to investigate your file. These are things I’ve noticed in working with borrowers over the last couple of years.

You will notice that I’m not talking about qualifications. The topic of loan auditor qualifications, which is what I see most people getting hung up on, has been written about extensively on this blog and on other blogs. It’s usually centered on whether someone would make a good expert witness.

I think looking for an auditor based solely on the expert witness issue is short sighted, simply because most audits never come up as evidence in a lawsuit, and there are quite a few other good reasons for a homeowner to get one done.

I haven’t seen anyone else talk about these observations, but I think they are equally as important as the auditor’s qualifications.

1) How Do You Feel about Working with the Auditor?

Do you get weird vibes from them? If so, don’t disregard it. I find intuition to be a valuable tool in terms of working with people. If I get a weird feeling from someone, it always turns out that my initial gut feeling turns out to be correct.

If you feel like you’re being B.S.’d, pay attention. I think a lot of people were so desperate to save their homes that they disregarded their own better judgment and rushed ahead anyway.

And speaking of feelings, that brings me to my next point:

2) Don’t Hire Someone Because of their Sales Pitch, Their Likability, or Because You Feel Bad About Your Situation

I consistently find that people want to be “sold.” I suppose it’s just the way we’ve all be conditioned.

“Why should I use your services over so-and-so?”

Buying legal services is not like buying a pair of shoes!

You shouldn’t base your decision on who to hire based on their sales pitch, their likability or because you need to feel better about your foreclosure situation.

I value truthfulness and honesty over likability. I would rather have the truth, because I want to make decisions based on good information. And sometimes, when you’re dealing with foreclosure, it’s like being emotionally tortured and you might want someone to make you feel better by giving you a guarantee or making promises of a certain outcome. In that moment, what you really need is someone to tell you the truth about your situation.

Foreclosure, short sales and bankruptcy are not comfortable topics. You are going to feel uncomfortable about these subjects at some point in the process. I think we have all be OK with feeling uncomfortable about it for awhile so that we can process the feeling and move through it.

Don’t put your need to be “sold” ahead of getting the truth about your situation.

Don’t put your need to “like” someone ahead of getting the truth.

And if you’re feeling emotionally vulnerable because of your foreclosure situation, certainly don’t put your need to feel better ahead of getting the truth.

3) Is the person consistently showing up normally?

Does the person consistently act like they are running a business? Do they return your calls or e-mails within a reasonable period of time?

A friend of mine told me that she was solicited by someone who wanted to do an audit for her. They wanted a large fee upfront. However, she could never reach them during business hours – her calls were always returned on weekends or evenings. They are called “business hours” for a reason. This is just one example of what I’d consider odd behavior, but there are other things that would be a tip off that something isn’t right.

Another example would be if you get a weird vibe (see #1, above) or asked to pay an upfront fee. That leads me to number 3, below.

3) Is the company or auditor compliant with the FTC’s MARS Rule?

I have determined that the MARS rule applies and I don’t collect a fee up front to review paperwork. If you are asked to pay an upfront fee, you should ask the company if they are familiar with the MARS rule. Section 322.5 governs the upfront fee rule, and borrowers should be familiar with this rule because it was created to protect you.

See related post: We’re on MARS now

These are just three, non-qualification related things I’d look for in an auditor. If you want my points on qualifications, here’s a post I did recently called 5 Reasons Every Homeowner Should Consider Getting a Professional Audit.” It’s not just about the “expert witness” argument.