Last week I was reviewing the information in FIN’s Google Analytics account and noticed a search term that we’re optimized for on Google: “legitimate loan audits.”
One of the cool things about moving to this new domain is that I have access to this information, and it helps me create content that you, the readers, want to read about.
So what exactly is a “legitimate” loan audit? Good question, I’m glad you asked!
If you’ve been a regular reader of my blog, you know that I’ve been racking my brain for the last couple of years trying to better explain what it is that I do, especially when it comes to loans.
And it seems like no matter how hard I try to explain it, I still get phone calls and e-mails from people asking the same questions about loan audits. I take this to mean that I need to do a better job of explaining this aspect of my business to prospective clients.
In my mind, I do the same thing now that I did as a paralegal in a law firm, which is review documents to get facts and evidence and organize them them into an easily digestible format for lawyers and clients. However, borrowers looking for help don’t always understand how that fits in with what I do now. I only focus on facts and evidence; it’s the lawyer’s job to build the case around the facts.
There is also a lot of confusing stuff on the internet about foreclosure, foreclosure defense, loan audits and how to fight foreclosure.
Technology is a double edged sword: on the one hand, it’s excellent for research and sharing information. On the other hand, it’s easy to become confused after reading something on the internet and wonder if it applies to your specific situation.
So here’s my answer to the question:
A legitimate loan audit is a critical review of the originating loan documents, foreclosure documents and other evidence that makes up the fact pattern of a foreclosure case.
Then, depending on the facts and evidence discovered in the review, additional research is required to verify, or find evidence to the contrary, from the initial review of the documents.
It’s usually during the research phase that I find additional facts or evidence that changes the fact pattern uncovered in the initial review of the documents from the borrower.
This level of research, however, should be done by someone who is familiar with the overall foreclosure case law and fact patterns in other cases in the United States. For example, the famous robo-signer, Erica Johnson Seck, has been deposed in cases in Florida. The case law would most likely not apply here in Arizona, but her deposition testimony could be used to support a claim that she lacked authority to execute an assignment in Arizona.
This is just one example, but in many of the documents I review, I’ve already seen the same set of facts in other cases and can help tie those facts together with the loan I’m reviewing.
What I do in terms of reviewing loans is very specialized. It’s not about the “expert witness,” argument that gets tossed around by lawyers, either. Frankly, most reports won’t ever be used in court cases, although I have the credentials to become qualified as an expert witness.
Having been a paralegal in law firms of varying sizes, I can safely say that it makes more sense for most lawyers to outsource this type of work. The average lawyer lacks the background and familiarity with the factual issues to effectively research all the facts. Further, many of the lawyers practicing are small firms or solo lawyers and lack the resources to do this type of research, making it expensive for their clients to do the work in house.
Getting back to the audit question, after all the documents are reviewed, and all the facts are researched and additional evidence uncovered, the summary of the findings of this process is synthesized into a report.
A good report is organized and well written, without grammar and spelling mistakes. It should also establish a foundation in the report for the conclusions that are made in the report, and those conclusions should be supported by facts and evidence.
I can always tell when an auditor is basing their report on a computerized software program/securitization terminal instead of doing investigative research on their own, because they do not establish a foundation for their conclusions in the report. Just because the auditor makes a bald statement that something is so, doesn’t make it so, especially when there are no facts or evidence to back up the conclusion.
Tomorrow I’ll post about Things to Look for in an Auditor. Stay tuned!
In the meantime, if you want to audit your own loan, go here!
Questions? Leave me a comment below!