I will now begin to regularly update this page with audit results.  The findings may be surprising, 

Oct 2009

Great News

Attorney George Taggart in Sacramento had an Unlawful Detainer hearing yesterday for a client I did an audit for.  The judge did "entertain" other arguments that just possession of the property.  Issues that I had found regarding the Substitution of Trustee and the Assignment of Beneficiary, or lack of, was presented to the court.  The judge postponed the UD for 60 days, so that the lender could find the "missing" Assignment of Beneficiary.  The Assignment goes right to the heart of Legal Standing in this case.

Sep 2009

Broker\Lender Conspiracy

Just nailed an audit.  Conclusive proof of broker\lender conspiracy to commit loan fraud through the falsifying of a loan applications income and employment.  The lender was fully aware of it and actually participated in the fraud.  This shall be an interesting case to follow.

Other findings with audits

Loan documents presented for review.  Foreclosure in process.  Examination reveals that the borrower's did not speak English, all conversations with the broker were in Tagalog.  As required by CA Civil Code 1632, certain documents would have required to be in Tagalog, which they were not, thus violating 1632.

Further investigation revealed that the broker had returned to the borrower, requesting that they pull out $120,000 for investing in properties with the broker.  Two properties to be purchased in the broker's name, and the rental income used to pay for the loan.  Broker did not buy the properties, but absconded with the money.

August 2009

Performed an audit for borrowers in Livermore CA.  These clients had been interviewed from the contracting attorney.  A review of the documents revealed that the loan documents were drawn and printed out on April 10.  As examination of the documents continued, at which time is was discovered that the loan documents were signed on April 7.  The loan documents and the notarization of the documents had been backdated, and the lender, World Savings, did not catch this.

The attorney, upon reading the audit placed a call to LFI to determine the significance.  It was pointed out that the backdating of the documents constituted fraud, to include Notary Fraud as well.  This would mean that all the documents would be void and unenforciible.

Awaiting response from lender.

2 Days before Forclosure Sale

Client refinanced in 2004. Examination found Federal violations of Truth In Lending Act.  Rights To Cancel was not filled in.  Costs not properly disclosed. Results: foreclosure stopped and law suit filed to rescind the loan, refund all interest paid, all costs to acquire the loan, plus attorney's fees and damages. 

Three Days Before Foreclosure Sale

Documents revealed Right to Cancel not correct. Interest rate promised and loan program was not the same as delivered. Bait and Switch. Broker not state licensed.Results: Foreclosure sale was stopped day before sale.

Home Already Foreclosed

Purchase loan in 2006. Examination of documents concluded that there was no Truth In Lending in final documents along with other missing disclosures. Contact with lender revealed that they did not have Truth In Lending either. No early disclosures provided except for Pre Qual TIL which reflected an APR of 3.6569, but privided loan was 6.5%. 6500 -  Consumer Protection, § 226.18 (c) § 226.19, "Early Disclosure" by not providing required disclosures within the time frames specified in this law. Results: Demand letter sent to cease and desist from eviction proceedings, return ownership to the clients, rescind the loan, pay $35,000 in damages plus attorneys fees.

Home In Foreclosure

Bait-in-Switch, Originating lender's initial disclosures indicated a 2 year fixed loan at 7.00% with 2 year prepayment penalty. No broker disclosures. Terms were discussed in Spanish. Final loan documents had a 2 year fixed rate with two year prepayment penalty at 8.% start rate. Clients thought they were getting the terms as originally discussed in Spanish and signed the loan documents which were printed in English and were not translated by the notary. Results: Foreclosure stopped and Loan Modified.

Home In Foreclosure

Refinance Loan in 2006. Elderly woman, 70 years old. After signing, attempted to cancel loan by calling lender and title company. Both told her to call broker. Faxed Right to Cancel to broker. Broker refused to Cancel. While this was happening, appraiser came to appraise home, after docs had been signed. Client told appraiser that loan was cancelled. Appraiser called broker who told him to "do it anyway. Elderly woman who can be easily deceived." Status: Foreclosure stopped and Lawsuit filed against broker and lender.

Foreclosure with Auction scheduled in three weeks

Clients refinanced in late 2006 from a 2 Year Fixed at 5.75%  into a 2 year fixed at 10%, due to needing funds for the completition of renovations to home and with an NOD.  Broker pre-approved for an Option ARM loan Lender which would never have been approved. Claimed that lender turned down loan due to appraisal issues. Bait and Switch issues. Stated income issues when income documentation had been provided. Later Appraisal fraud for non-disclosure. Results: Foreclosure postponed. Loan mod settlement with lender in process. Lawsuit against broker filed.