What is a Forensic Mortgage Audit?
A Forensic Mortgage Audit is a concise examination of loan documents that were compiled for an approval and servicing of a mortgage. How concise they are, depends on the the firm doing them. I can't speak for them but I can speak for myself. I examine as much I can get my hands on. I examine the initial application, appraisal, lender file, final title company file and whatever the client has in their possession.
Once I have these documents, I look for things that violate TILA, RESPA, HOEPA, HMDA, ECOA and other federal regulations. We also look for items that violate state law as well and we look to see if the Loan Officer and/or Broker are properly licensed. We even look to see if they have any felony convictions that may be relevant. Unlike most of my competitors, I do all my auditing by hand.