Unfortunately, homeowners who can barely afford their monthly mortgage payments or who are in foreclosure are in a very vulnerable position and can become easy prey for con-artists.
Beware of companies offering “forensic audits” and promises of obtaining new payment terms for a mortgage or a receiving a loan modification.
The Federal Trade Commission recently petitioned a U.S. District Court in California to shutdown a company that was allegedly offering pricey forensic audits together with claims that the company had a 100% chance that they would uncover violations of federal and state mortgage law that would entitle the homeowner to a mortgage modification or other relief.
A forensic audit is basically a review of various loan documents, closing papers, correspondence from the lender, and foreclosure papers to determine if the lender violated any laws in providing the mortgage or enforcing payment of it.
In our Long Island foreclosure defense practice, we regularly review such papers and documents to ascertain what defenses may be asserted in a foreclosure proceeding, but we do not make any promises or representations.
However, some unscrupulous con-artists have been setting up shop under the guise of offering a forensic loan analysis. For over a year, the Federal Trade Commission has labeled these audits as a new twist on foreclosure rescue fraud.
The FTC states that these so-called auditors, for a fee of many hundreds or even thousands of dollars, use half-truths and outright lies to sell services that promise relief to homeowners in distress.
In particular, the FTC has said  that there is no evidence that forensic mortgage loan audits will help a consumer 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.
It is unfortunate, but many of our clients come to us to defend them in a foreclosure case after having been taken advantage of by one of these unscrupulous companies. We do NOT offer forensic audits of mortgages, but do review all mortgage documents when we represent clients with defending a foreclosure on Long Island.
Last week the FTC effectively shut down a very large operation based in California, as well as several websites that it operated which offered bogus relief. The companies were owned by Ryan Zimmerman and went by several names including Consumer Advocates Group Experts, LLC.
The FTC has advice for consumers about mortgage modification and foreclosure rescue scams. For more information see the website Your Home  and the publication Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud .