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What is a loan compliance audit?

A compliance audit is a comprehensive review of an organization’s adherence to regulatory guidelines. It is a comprehensive review and analysis of all documentation related to an existing residential real estate loan. It is a detailed examination of specific loan documents, borrower fees and, where applicable, lender actions during the mortgage process. All mortgages must comply with fair lending laws. Any error or omission on the part of a lender or their agents constitutes a violation. A loan auditor will verify compliance with the following laws:

  • State and Federal Predatory Lending Laws
  • Real Estate Settlement & Procedures Act (RESPA)
  • Truth in Lending Act (TILA)
  • Home Mortgage Disclosure Act (HMDA)
  • Fair Housing Act (FHA)
  • Equal Credit Opportunity Act (ECOA) and more

A recent study by ComplianceEase, found that 17 percent of loans currently fail for Truth in Lending Act (TILA) reasons and another 6 percent of the loans failed for being outside of the Real Estate Settlement Procedures Act (RESPA) tolerances. If your mortgage paperwork fails to comply with US law, that gives us leverage to go back to the lender and request a loan modification on your behalf.

We will conduct a loan compliance audit to ensure your lending complied with US law when preparing your loan. That is why we request your mortgage documentation to ensure the lender represented your interest by complying with the law. If they failed to achieve compliance, then we will discuss the breaches with you and have we can use this information to expedite our negotations for favorable loan modification on your behalf.