Homeowners Beware: Forensic Loan Audit Scam

Catherine New
mortgage scam
mortgage scam

The calls started last November. Speaking in Spanish, a representative from New Century Solutions in Lake Forest, Calif., pitched Jose Chirino to purchase a forensic loan audit. For $2,995, the representative said, an audit could help the San Jose, Calif., homeowner get a much-desired loan modification and principal reduction. Chirino, who works for Santa Clara County, said no, but New Century called again -- and again, and again. After about 20 such calls, Chirino finally agreed and sent $1,500 to start the process in January.

In a written contract, New Century said an attorney would review and advise Chirino, draft a demand a letter, and negotiate with his lender. And then, nothing happened.

He's not alone. Hundreds of organizations have cropped up over the last two years offering forensic loan audits, often linked to professional attorneys and auditors. They promise to review a homeowner's mortgage loan documents to determine whether the lender complied with state and federal lending laws, and expedite a loan modification request. While the audit may indeed reveal errors in loan documents, the process very rarely results in a loan modification or rescind.