What is a Loan Audit?
A Loan Audit is a comprehensive loan lending investigation which will identify infractions and violations committed by your lender when they originally funded your loan. Obtaining an audit is the first step to potentially successfully modify your home loan. If you are behind on your mortgage payments, facing default or foreclosure the audit is a critical tool that will be used as leverage with your Lender.

'According to the Truth in Lending Act, even a small mistake with calculating a borrower’s annual percentage rate could be an actionable violation, enabling the borrower to rescind the loan. Therefore, the threat of a lawsuit is often sufficient to persuade an otherwise uncooperative lender to negotiate an attractive work out with the borrower'

What is a Loan Modification?

A loan modification is a change to the loan contract which is agreed to by the lender and the homeowner. The lender modifies the existing loan(s) in order to work with the homeowner because of hardship. The purpose is to help make the loan(s) more affordable. Usually it is in the form of a rate reduction or fixing the rate for certain duration of time (Rate Freeze). In the past, this was only used when a borrower was delinquent and suffered a hardship such as a job loss, divorce, illness, etc. If the homeowner can afford their home and just not their mortgage, then they may be eligible for a loan modification.

A key factor that is required in every loan modification submission is the existence of a financial hardship for the borrower. The hardship can be temporary in nature or permanent, but the borrower must be able to prove the hardship.
 

Hardships that may get Loan Modifications approved:

Documenting the hardship is very important to a loss mitigator and will be verified during the approval process. It needs to be a legitimate hardship for the lender to grant the modification.