Audit Company Says Lenders Are ‘Trapping’ Borrowers

foreclosure prevention fraud has received [u][link=http://www.mortgageorb.com/e107_plugins/content/content.php?content.3312]much attention[/link][/u] in recent weeks, one firm is suggesting that lenders are springing ‘loan modification traps’ of criminal prosecution against borrowers trying to avoid foreclosure. Ashburn, Va.-based Mortgage Fraud Examiners says it has observed a new trend in which lenders are turning in borrowers to the FBI if the borrowers' financial information – obtained during the loan renegotiation process – is inconsistent with what was received during origination. "Homeowners must be careful to retrieve a copy of their original loan application before requesting a loan modification," says the company's CEO, Storm Bradford. "Information on the new request must match the original application, or else be clearly explained and documented." Mortgage Fraud Examiners offers audits to borrowers who are attempting to modify their loans. Bradford estimates that as many as 85% of all mortgages may be legally unenforceable because of defects like lost notes, improper notices, and appraisal and/or mortgage fraud. "When facing a possible lawsuit after an audit, lenders suddenly get religion and become much more cooperative in renegotiating the terms of a loan," Bradford claims. SOURCE: Mortgage Fraud Ex

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