Forensic loan audits are reviews that determine if a loan is correct under the law. When homeowners are in the process of receiving a new loan, whether it is entirely new or modified, the loan audit ensures that the terms of the loan are legal. According to federal law, especially those defined in the Truth In Lending Act(TILA), loans must be created in a certain way, as to respect the legal rights of the consumer. TILA, for example, specifies that lender should make clear disclosures regarding the terms and cost of a loan. However, some loans are still created in violation of this law and others.

Before consenting to a loan, it can be important to make sure that your loan is legally sound. To obtain a loan audit on a mortgage, homeowners can consult with loan specialists, auditors, and law firms that offer these services. In addition to the protection offered by this practice when beginning a mortgage, forensic loan audits can help when homeowners are facing foreclosure or requesting loan modification. If the loan is found to be in violation of the law, it may be grounds for taking wrongful foreclosure or other legal action against the lender. As a result, some lenders may be willing to negotiate more if they become informed of a fault on their part in the terms of the loan.