For Consumers

MORTGAGE FRAUD MAY MAKE YOUR MORTGAGE LEGALLY VOID

Because of the mortgage industry's carelessness, haste, and downright fraud in recent years, an estimated 85% of all loan documents have errors written into them. You already know from the news that during the refinancing craze and the real estate boom over the last decade, lenders were shoveling mortgages out the door as fast as they could.

Predatory lending filled some mortgages with unlawful terms or details that consumers didn’t understand. Many mortgages are filled with errors, legally invalid, and sometimes unenforceable. Lenders and mortgage brokers violate Truth In Lending Act (”TILA”) and the Real Estate Settlement Procedures Act (”RESPA”) daily. Some subprime or normal loans can be unconscionable and unfair. Mortgages are routinely sold multiple times, often too quickly and without proper documentation, leading to a greater legal mess.

Consider that in recent years the mortgage lifecycle. From the person who took the application to the person that closed the loan. There were a lot of people under a lot of pressure to do a lot of things they shouldn't have. Instead of thinking defensive about your loan, start thinking on the Offense!!

Here are just some of the things that we are looking for:

NEGLIGENT MISREPRESENTATION
When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation. (stated, NIV), this could benefit your case.

BREACH OF CONTRACT
The note and its attachments are a contract. The lender must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow?

CONSTRUCTIVE FRAUD
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the lender or underwriter or anyone working for the lender fail to disclose any material facts to the borrower?

FRAUD AND NEGLIGENT MISREPRESENTATION
Were any representations, statements, or comments, written or oral made by the loan officer, broker, notary or anyone else which contradicted the terms of the documents?
Once we find violations in your closing documents, you then will have your ammunition to present to your lender to encourage them to approve your request for a loan modification. You may be entitled to interest repayment from your lender, monetary damages, reduction in principle balance and more!! Fight back with a Forensic Audit!

Were you a victim of predatory lending?

You didn’t know which mortgage fees were negotiable – Or how the lender actually made money on you. Without this understanding, a smooth talking mortgage loan officer could have bilked you out of thousands of extra dollars . . . legally, in mere seconds, since you don't actually write a check for these costs. Remember, the loan officer is different from your friendly bank teller. The bank teller is paid a salary to be courteous and helpful. The loan officer's job is to make money and an get paid a commission.
You trusted the first loan officer that you talk to. – You probably wouldn't say yes if someone asked you to marry them on your first date. Why would you just say yes to a stranger about a commitment of the largest single investment you will ever make? In fact, it will probably last longer than most marriages!
You agreed to an interest-only or "payment option" adjustable-rate loan primarily to qualify for a more expensive house than you could normally afford. – In the current market of negative appreciation and falling prices, such a loan could be leaving you with a mortgage balance that could be more than the value of your home. And if the payment adjusts from a below-market teaser rate, you may be paying hundreds or even thousands of dollars more per month or may even no longer be able to afford the mortgage. You may be looking at a foreclosure and the loss of your biggest investment.
You thought the interest rate is always the main thing. Most so-called astute mortgage shoppers think they should call around to shop rates. And rate envy is common, especially among male borrowers. But what closing costs will you need to pay to get that fabulous advertised rate? Do comparison shopping not just on the interest rate but on all of the loan costs.
You didn’t double checking the final fees listed on the closing docs to the good faith estimate. – It is real easy for a lender or broker to pack on fees because of the huge volume of documents you will need to sign at closing. A deceitful closing agent may also use various tactics to distract you from the inflated numbers so you don’t even notice.
You didn’t know if your mortgage loan was written with a prepayment penalty – If you need to refinance tp afford the monthly payment you may not be able to afford the prepayment penalty which is normally at least six months of interest.
You thought you have to own a home and renting is just throwing money away – The down payment of 3-20% of the cost of the home, the realtor fees of 6-7%, the mortgage broker fees of 6-7%, the closing costs, add it all up and you can be talking some real money. Owning a home isn’t for everyone and renting isn’t always a bad option.
You didn’t know if you were paying a back end yield spread – This is a fee paid to the brokers and loan officers for upselling the interest rate to borrow money on your home loan.
You paid for “mandatory” add-ons – mortgage life insurance, credit insurance or some other add-on is useful only to increase the amount of money the broker receives.
You paid hundreds of dollars to have a company set up bi-weekly mortgage payment plan – You could have done this yourself. Just toss and extra $100 or so toward the principal every month and the results are the same

How can an audit stop a foreclosure?
If you are in foreclosure, the proper litigation can stop the foreclosure process immediately. A loan audit disclosing violations will often stop a foreclosure in its tracks.

What is a forensic mortgage audit?
A Forensic Mortgage Audit is the comprehensive review of all loan documentation including legal documents, transactional data, and other evidence pertaining to your real estate loan that has been funded. A forensic mortgage audit identifies any illegalities performed by the lender, their broker, or other parties in conjunction with the mortgage. During the audit process, skilled professionals review all documents received from your lender from the date you applied to the date you funded your loan including any envelopes, faxes and emails to ensure that your loan meets all legal requirements that were in effect at the time the loan was funded.

Why is a forensic mortgage audit important?
Loans must be legal to remain enforceable by the lender. Loan Violations are serious offenses of Federal Consumer Protection Law and lenders may face stiff fines and legal consequences for breaking these laws.
Mortgage bankers, banks and servicers are run by business people. They understand the financial ramifications of their mistakes and usually want to avoid expensive litigation or risk being charged with large fines. When their money is on the line, these firms can often be persuaded to more easily reach agreement with their borrowers.
If a loan was funded unlawfully, the borrower may be entitled to compensation, a refund of all interest and principal payments made for the last three years, all non-recurring closing costs, legal fees, or a renegotiation or modification of the terms of the loan. From 2000-2007, tens of thousands of loans were funded unlawfully. Your loan may be unlawful, and you may be entitled to substantial damages whether or not you're currently in foreclosure.
A forensic mortgage audit determines violations of the laws governing lenders. An audit report provides a powerful tool for negotiating with your lender. Whether you need your loan modified or you need to sell your home as a “short sale” or even if you need to have your loan rescinded, your lender will be motivated to work with you when you have evidence of their violations.
How does a forensic mortgage audit help a home owner?
Violations are the leverage used to present your case with your lender. The more violations discovered, the better your chances of obtaining a favorable settlement. The chances of a successful settlement increase with the most severe violations.

What should a proper loan audit look for?
A thorough loan audit should look for:
1) Violations of Federal, State or Local Laws
The act of using your home as collateral in obtaining a mortgage is covered by numerous federal, state and local laws. These laws are in place to protect your rights when you use your home as collateral in a mortgage transaction. The audit professional will review your loan documents to determine if there are differences between the disclosure of information in your loan documents you received and the disclosure of information required by law.
2) Constructive Fraud
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the broker or loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower?
3) Fraud and Negligent Misrepresentation
Were any representations, statements, or comments, written or oral made by the loan officer, broker, escrow or anyone else which contradicted the terms of the documents? When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.
4) Excessive Fees
Were there any excessive fees or improper charges made by the lender or loan broker? Are there any deceptive, abusive or predatory lending practices or an excessive prepayment penalty? Is there a Net Tangible Benefit to the Borrower in the mortgage transaction? Was there a proper analysis to determine if the Borrower can afford the payments on the loan? Were the fees properly disclosed?
5) Breach of Contract
The note and its attachments are a contract. The lender must follow all the terms of the contract such as the way the interest is calculated, and the penalties are assessed. Were there any terms in the contract which the lender failed to follow?

What happens if there are violations in my loan?
Once the loan audit determines that you may have been a victim of deceptive lending practices or any other type of mortgage compliance issue stated above, you have the leverage to fight your lender.
The course of action you should take is often dependent upon your current situation. If you are not seriously delinquent on your loan, but have difficulty making your mortgage payments, you may want to consider the use of our loan modification partner to assist you in reaching an agreement with your lender to modify your loan terms. A loan audit disclosing violations will certainly give you leverage you need to get the best loan modification.

If you have received a Notice of Default or are in Foreclosure, you should consider hiring an attorney who is skilled in consumer advocacy, predatory lending and real estate law. If you need help in locating a skilled attorney, we may be able to assist you.

The attorney will reach a settlement agreement with the lender (most cases) or continue on to trial (rare situations) and demonstrate to a judge or jury how the lender has willfully failed to comply with Federal Law.
In most cases, it is NOT necessary for you to make mortgage payments while the lawsuit is pending, however placing your mortgage payment in a trust account will show good faith to the court as well as quickly add up for a sizeable fund to negotiate with, if needed.

It is also unlawful for the lender to report negative information about you to the Credit Reporting Agencies while the lawsuit is pending under the Fair Credit Reporting Act.
How can a loan audit stop a foreclosure?
If you are in foreclosure, the proper litigation can stop the foreclosure process immediately. A loan audit disclosing violations will stop a foreclosure in its tracks.

The law gives a borrower a limited amount of time to act. If you wait, you may not be able to take action later.

How do I begin?

Here is an overview of how the Forensic Mortgage Audits (ANGEL PROCESSING CORP) program works:

1. ANGEL PROCESSING CORP will conduct a Forensic Loan Audit which scrutinizes the mortgage documents you received upon the closing of your loans(s) and look for TILA, RESPA and HOEPA violations by your lender. Once you receive your Audit, you will know what violations, if any, were committed in the handling of your loan. (statistically, nearly every loan has at least some violations) You can then decide if you should proceed to seek a remedy. If you do proceed.

2. You will either be referred to our partners who specialize in Loan Modifications using our audits as leverage or you will be referred to attorneys we work with who can immediately file a Federal lawsuit on your behalf.

3. Armed with our audit indicating the lender’s violations, the Loan Modification firm will negotiate with your lender for a reduced payment and even possibly a reduction of your principal balance. Or, your Attorney will reach a settlement agreement with your lender using our audit to support your claim. If the claim continues into trial our audit will demonstrate to a judge and jury how the lender willfully failed to comply with the law.

Consider the Recovery and Stability act of 2009.

Millions are now waiting in line to speak to their lenders seeking relief.
Sick of waiting on the line for months to hear back from your lender?
If so, make some noise and consider a forensic audit on your loan documents.

You could Skip to the front of the line!!

Our Forensic Audits are completed by our chief compliance officer who came from one of the top 5 lenders in the country. Over 20 years of experience in underwriting loan documents.
Don’t attempt a loan modification without it.
You could wait months to speak to your lender, you only get one chance to get it right.

The best chance to save your house is step #1....

A Forensic Mortgage Audit.

Contact us today and we’ll help you get started!

For Mortgage Professionals

The traditional manual processes of compliance auditing are inefficient and prone to inaccuracy and data integrity concern.
If your organization lacks automated solutions for compliance procedures, the challenging process of maintaining compliance with regards to anti-predatory lending laws is complex, chaotic, and costly.

Many financial institutions faced with this dilemma have been forced to cease operations in cities and states where they do not have the right technological resources to comply with the complex and frequently changing patchwork of statutes and ordinances. Angel Processing offers innovative solutions to answer this challenge.

Through automation, our solutions simplify the compliance audit workflow process while increasing accuracy and uniformity levels. Our solutions use proven cutting-edge analytics to identify instances of non-compliance and explain the violations through narrative findings reports.

Our sophisticated yet easy-to-understand statistical management reports provide institutions with an advance warning system to compare production data and track quality trends. Upon the submittal of loan data, our solutions use the Critical Decision platform to render a clearly the non-compliance risk level.

Centralize Controls and Reduce Costs
The 2010 RESPA amendments created new compliance challenges for lenders trying to get control of fees, disclosures, and changed circumstances policies. As lenders struggle to ensure that originators deliver accurate disclosures, Angel Processing’s loan data shows that the industry continues to violate HUD-1 fee tolerances on almost 20% of audited loans, costing an average of $1000 in reimbursements for each of those loans, due to incorrect GFEs. QC Auditor™ is an entirely web-based RESPA compliance solution that reduces the costs and simplifies the challenges of staying RESPA compliant by centralizing RESPA workflow, controlling revised GFEs and changed circumstances, automating fee tolerance audits, and providing reports that pinpoint violations from application to closing and beyond.

Simplify Your RESPA Compliance
Our computerized compliance solution combines Angel Processing’s compliance expertise and innovative technology to ensure that your disclosures - from initial GFE to final HUD-1 - are accurate and compliant:

		Control fee increases for changed circumstances
		Instantly roll out changes to corporate policies
		Determine in one click whether, and when, revised GFEs are allowed
		Ensure HUD-1 fees do not exceed 0% and 10% tolerances of binding GFE
		Prevent costly reimbursements by running continuous audits during origination

Control your RESPA Compliance Workflow
QC Auditor's consistent, uniform auditing and comprehensive reporting helps you build an efficient and compliant origination workflow:

		Keep centralized reports of all loans, their violations, and their reimbursements
		Management maintains all available changed circumstances in one location
		Collaborate online while still maintaining a centralized, easily-accessible audit trail

		Maintain a complete audit trail of changed circumstances, when, and why

Advanced Features You Can't Find Anywhere Else
QC Auditor also offers all in house manual regulatory compliance PLUS:

		Comprehensive support from Angel Processing’s team of experts
		Tests that highlight and summarize all violations
		Detailed reason text and legislative credentials that explain test results

		Management reports to monitor progress of originations and reimbursements