Your best tool to negotiate with your mortgage company is the discovery of a law on the Truth in Lending (TILA) violation, which in some cases, can give you the right to terminate the loan. Federal and state laws require mortgage companies to follow specific guidelines when originating home loans, and consequently many have TILA mortgage loans and / or RESPA violations which can be used as a bargaining tool in negotiating with a mortgage modification company.

Many of the loans originated by mortgage brokers and lenders in recent years have inexplicable fees and charges or were manipulated by borrowers overstated income or inflating the value of the property to allow the lender illegally profit from the sale of mortgages to investors in the secondary market. Subprime mortgages with hidden interest rate adjustments and pre-payment penalties or option ARM loans with minimum payment options allow borrowers to defer to a point of interest in the future when the loan recasts and forces the borrower difficulties by paying a higher mortgage payment. In most cases, refinancing is not an option due to declining property values or high ratio of debt to income. Only a forensic audit Loan can discover and document these violations, which can be used against the lender when negotiating a loan modification.

Another violation occurs when a creditor can not provide adequate notice of the lender the right to cancel. The right of rescission may be extended for up to three years in certain circumstances. When the right is extended by three years, you can terminate the loan at any time before the three years of what it means is that the loan is treated as if it never existed. This means that the creditor must repay all interest paid, all closing fees, all broker fees, and even to pay the attorney’s fees.

Extending the right of rescission is a powerful tool to help borrowers who have been victims of predatory lending. During a forensic audit Loan Mortgage often discover TILA violations, which can be used as bargaining leverage when a loan modification.

This should not be construed as legal advice.