Hill Commercial Capital

A Forensic Mortgage Loan Audit results in a comprehensive audit that reveals violations of Federal, State, County and Municipal Codes including RESPA, TILA, HOEPA, ECOA, and Tangible Net Benefit, detailing every violation, their severity, and the specific Code in violation.  All of the forensic loan audit reports will reveal these guiding queries:

1. Did the lender provide a good loan?  Did the lender violate obvious "Good Faith" guidelines? For example, did they qualify the borrower for a loan that they could not afford?
2. Did the lender violate TILA guidelines?  Did they tell the borrower one thing, but delivered something different at the closing?
3. Did they provide the correct documentation to the borrower at the proper times? Was it filled out correctly? 
4. Are the parameters of the loan in violation of the Real Estate Settlement Procedures Act (RESPA) or the Truth in Lending Act (TILA)?
5. Did the loan deliver a Tangible Net Benefit to the Borrower?

The Forensic Audit will:

• Determine whether all conflicting information or discrepancies in the application file were resolved and properly documented in writing prior to submission of the loan for underwriting.
• Determine whether there are sufficient and documented compensating factors if the debt ratios exceed loan program limits.
• Determine the accuracy and completeness of underwriting conclusions and mortgagee documentation.
• Determine whether all conditions were cleared prior to closing.
• Determine whether the HUD1 Settlement Statement (HUD-1) was accurately prepared and properly certified.  Assure that only allowable fees and charges were paid by the mortgagor.  The HUD1 should be compared with other relevant loan documents to determine whether the mortgagor made the required minimum investment. 
• Determine whether the loan file contains all required loan processing, underwriting and legal documents.
• (FHA) Determine whether the loan was submitted for insurance within 60 days of closing or included a payment history showing the loan was current when it was submitted for mortgage insurance. 
• Determine whether the seller acquired the property at the time of or soon before closing, indicating a possible property "flip."
• If possible, determine whether the mortgagor transferred the property at the time of closing or soon after closing, indicating the possible use of a "strawbuyer" in the transaction.
• Determine whether all items requiring documentation have been properly evidenced and retained in the file.
• (FHA) Determine that no one is employed for HUD origination, processing, underwriting or servicing who is debarred, suspended, subject to a Limited Denial of Participation (LDP) or otherwise restricted from participation in HUD/FHA programs.  HUD recommends a periodic check of the employee list, at least semi-annually.
• Determine whether relevant loan documents were signed in blank by the mortgagor or employee(s) of the mortgagee; and that all corrections were initialed by the mortgagor or employee(s) of the mortgagee.
• Determine whether the loan is subject to any HOEPA laws and all appropriate high cost lending disclosures were made.
• Determine whether verifications of employment, verifications of deposit and the credit report were handled by any interested third party or the mortgagor.
• Determine if more than one credit report was ordered; determine whether all credit reports were submitted with the loan package to underwriting.
• Determine whether the preliminary loan application lists each outstanding liability and each asset of the mortgagor that was used to qualify for the mortgage.
• (FHA) Determine whether any outstanding judgments shown on the credit report were shown on the Form HUD 92900 with an accompanying explanation and documentation.  Explanations are not acceptable where there is a delinquency or judgment involving debt to the Federal Government.
• Determine whether the loan file contains pertinent documentation if the mortgagor's source of funds for the required minimum investment was other than deposits in a savings institution and whether the source of funds was verified.
• Determine whether there was written re-verification of the mortgagor's employment, deposits, gift letter or other source of funds and a new credit report reordered.
• (FHA) Determine whether all conflicting information or discrepancies were resolved and properly documented in writing prior to submission of the loan to HUD-FHA for mortgage insurance endorsement. 
• This involves comparison of the preliminary loan application and original verifications of employment, verifications of deposit, final loan application Form HUD 92900 and all re-verification documents.
• Determine whether a field review of the appraisal was performed.
• Determine the accuracy and completeness of underwriting conclusions and mortgagee documentation.