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Mortgage Securitization Forensic Auditors

In the headlines recently there have been a lot of stories about Bank of America and other lenders that have been guilty of wrongful foreclosure or, if you prefer, a fraudulent foreclosure. In these cases, what has happened is that the loan has not been properly securitized, or turned into a security that can be traded and sold like a stock or a bond. When this process is done incorrectly, the note and the deed become separated and go down two different paths.

If the deed and the note do become separated, then any foreclosure action that is taken against the homeowner is a wrongful foreclosure and therefore, illegal. If this is the case, it is possible for the homeowner to stop foreclosure. All he or she needs to do is take action in the form of a securitization audit.

There are few things banks hate more than a securitization audit. Why is that, you ask? Because nothing will as blatantly exposemortgage fraud on the part of a lender like a securitization audit. Done right, a securitization audit will show that the bank does not possess the required documents needed to foreclose, and therefore must stop foreclosure proceedings.

The actual process involved in a securitization audit is a lot like trying to find a needle in a haystack. An auditor will search through many documents looking for proof that a loan was securitized. Sometimes an auditor is able to pinpoint exactly where the loan is among thousands of investments. An auditor will also examine the mortgage assignment, substitution of trustee, and notice of trustee sale documents to see who signed those documents.

Because many lenders have had to deal with so many foreclosures due to the current economic crisis that they created through their predatory loans, they have started to resort to forging signatures in order to keep foreclosure procedures moving. You may have heard about Bank of America getting into some hot water over their use of this practice, known as robosigning. An auditor can tell if an actual bank employee signed the document or if it was a robo-signature, and therefore a fraudulent foreclosure.

A securitization audit done right can take anywhere between 20 hours and 5 weeks to complete. There is a huge demand for these audits as people try to stop foreclosure on their homes. Banks hate these audits because they are so detailed and so good at exposing mortgage fraud, foreclosure fraud, and fraudulent chain of title, on the part of mortgage lenders, the banks know they have little chance of winning. Their chances of winning are so slim once a case reaches the court that on many occasions they will try to settle as soon as documents are submitted.

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