Forensic loan auditing is an inspection process that is used to determine the legality of a loan. Inspection will usually occur in all documents, paperwork, and agreements that are consented to as part of the loan. Under federal law, loans must be created in accordance with a number of requirements. A loan audit will check legality according to the laws of Truth In Lending Act(TILA), Real Estate Settlement Protection Act(RESPA), Home Ownership and Equity Protection Act(HOEPA), and other relevant lending laws.

For a homeowner, it is important that any loan entered into exhibits your legal rights. Although most homeowners are not informed of these requirements themselves, having the loan audit completed can offer the assurance that loan is indeed legal. In the event that a loan is not legal, an efficient loan audit will allow the violating terms to be changed before the loan, or if the loan has already started, to be dealt with appropriately. If a mortgage under foreclosure is revealed to be in violation of lending laws, the loan audit may help the homeowners to bring wrongful foreclosure against the lender, since their loan was unlawful.