Securitization Audit – Does It Really Help ?

Many people have doubt on the worth of mortgage audits or Securitization Audits. But the fact is a lot
depends on who is doing the audit. As we look into the history of foreclosure and audit, we can find that more than 80% of mortgages have legal violation. A big problem, however, is several mortgage audit companies are unable to produce the result that is expected of them. These companies probe through generic software which provides information just on Truth in Lending Act (TILA) and no more. There is a 3 year Statute of Limitations in most TILA violations. So in case the mortgage is 3 years plus older, there is not much help from audit even if the violation is exposed. In order to be effective the entire mortgage documents from that start till the end, should be reviewed manually. There are very few companies who actually go for this thorough research. But desired result can only be achieved if the auditor knows the case in and out.

A Common Violation
Fraud, a common violation, may be in the form of inflated assets, income or appraised value. In majority of the cases, the borrower is unaware of the fraud, as all this manipulation is done by the loan officer, with a mere objective to get the loan approved and earn commission. There is no Statute of Limitations in certain frauds and are enforceable even if the mortgage is over three years old. This manipulation is only possible if the appraiser, loan processor and/or underwriter are involved. As their duty include verifying the supporting documents and information contained in the application. There are various purposes for which mortgage or securitization audit is done. It is an effective way to determine whether the lender has the legal right to go through the foreclosure process.

For more info Securitization Audit Report OR Mortgage Audit