Pricing

Prices for a Basic Forensic Loan Audit varies dependant on the volume of files being submitted for auditing. We require the full payment of services ordered to be payable to F.L.A.C. Consultant Corp. Payment is required after services have been rendered and payment will be collected at time of delivery (local only) or payment will be required electronically prior to sending final product by email designated within Service Agreement. Services will be provided in a .pdf formatted file. Below is a breakdown of costs:

Basic Forensic Loan Audit will need the following:

Origination data , seller data, servicer data, updated data, including credit or valuation data from 3rd party providers. Document required for this forensic loan audit report is as follow:

Closing and Origination Documents

• Notes and riders

• Mortgage instruments and assignments

• Mortgage insurance certificate or mortgage guaranty certificate

• Assignment of Mortgage

• Satisfaction of Mortgage

• Quick Claim Deed

• Contracts

• Modification or assumption agreement

• Settlement statements/HUD-1

• Leasehold estate agreements

• Cooperative/condominium documents and statements

• CEMA documents

• Assignment and endorsement chains

• Title binder or final title insurance policy or other evidence of title

• Appraisal

• All Property Insurance

• Survey

• AVM Reports (if applicable)

• Inspections (Roof, Termite)

• Home inspections

• HUD 1 pg 1 and 2

• 1003 Uniform Mortgage Loan Applications, of all loans per subject property. All pages original and final

• 1008 Mortgage Loan Transmittal Summary

• Truth in Lending original and final

• Good Faith original and final

• Services Agreements

• Right of Rescission or Right to Cancel (Refinance)

• All disclosures

• Approval letters or denial letters

• Lender Notifications

• Lender statements

• Collection letters

With these documents you will get the compliance test report tier 1 and a Basic Forensic Loan Audit Report. Sample Report: PDF Sample of document required: PDF

What is a Forensic Loan Audit?

A forensic loan audit looks at loan documents for miscalculations, and it requires performing through investigations to determine if the loan terms are accurate, truthful in the integrity of the information and meet requirements of the applicable federal statutes. These regulations include the Truth in Lending Act, the Home Ownership and Equity Protection Act, and the Real Estate Settlement Procedures Act. By evaluating the level in the risk indicators by grade of Pass or Fail or minimum, substantial, warning or maximum risk levels. The industry test is run for the following sections: HOEPA, TILA, RESPA, State & Local Predatory State Regulations, Exceptions and Investors Customs Rules. These test look for High Cost (by State) APR result and Fess result (fee included and excluded), HELOC TIL result initial APR and current APR (finance charges paid to and by) Non finance charges fees, TILA Right of Rescission = HOEPA, State Rules review (fees not allow, late fees not allow or equal to 2 % (7040) Option ARM (55950). Licensed Review Lender, Geocode; Data result and supporting data, Making Home Affordable Enterprise Rule review.

The federal statutes determine which federal requirements need to be met by the lender in issuing the loan. These include mandatory disclosures, how and when such disclosures are made, limits on annual percentage rate, TILA over statement and understatement and a number of other requirements.

Forensic loan audits also analyze a loan to determine if it meets state and local requirements. Every state has some form of lending regulation. Some states choose to implement statutes that have language almost identical to that of the federal statutes, while others go well beyond the federal statutes and put even more restrictions on the lending industry.

States also may create their own causes of action for additional requirements. For example, California requires that a consumer who negotiated any sort of contract in a language other than English be provided with a translated copy of the contract.

In California, Nevada and Michigan, the lender must be able to prove that it had a structured internal policy to ensure the accuracy of the stated income on all stated-income loans. According to these states laws, this policy must be accurate and reliable.

Florida consumer laws and statutes 501.1377 that protect consumer and the 12 CFR Code is implemented and 15 USC is also apply with others that protect and regulate our industry.

As the used of forensic audit become more widespread, mortgage brokers must know what a forensic loan audit is and how it can be used.

Soon, lenders may perform an exit audit on each loan to ensure that the file is in order. Every loan a broker brings in also is likely to face closer scrutiny to ensure that all compliance regulations were met. These exit audits could prevent errors from slipping through the cracks.

A Forensic Loan Audit and Compliance Analysis should be done by a trained and experienced auditor with an underwriting background to be able to understand violations and conditions under specific loan program approval. Compliance experience is required to differentiate the different types of origination programs and loan structures. For a Forensic Loan Audit to sustain the scrutiny of a court of law it would require detailed accuracy in the loan review with supportive documentation outlining its findings.