The Federal Trade Commission calls it the latest twist in increasing foreclosure prevention scams: forensic auditors backed by attorneys who claim they can find laws your lender violated to get you off the hook.
“The ‘auditors’ say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan,” the FTC said.
It is a scam, particularly when they ask for an upfront fee – the biggest warning flag of any consumer financial service, the agency said.
According to the FTC and law enforcement:
- There is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.
- Some federal laws allow you to sue your lender based on errors in your loan documents. But even if you sue and win, your lender is not required to modify your loan simply to make your payments more affordable.
- If you cancel your loan, you will lose your home and you will have to return the money you borrowed to your lender.
The FTC has created a webpage on mortgage loan audit scams.