One of the popular catch-phrases being bandied about these days in the context of mortgage foreclosure defense is “my loan has TILA violations.” The acronym TILA refers to the Federal Truth-In-Lending Act, a significant body of Federal consumer protection legislation which provides detailed disclosure requirements which must be made by lenders in certain types of transactions, including mortgage loans. TILA also contains provisions relating to remedies for violations. However, TILA is only one of the many Federal laws applicable to mortgage loans, and your loan may have violations of other Federal lending laws as well.

In order to ascertain whether a particular mortgage loan complied with all required Federal lending laws, an audit of the loan documents may be performed. The audit is a detailed review of all of the transactions which were part of the mortgage loan: disclosure of fees and costs, nature and purpose of disbursements, disclosure of all necessary terms and provisions of the mortgage transaction, and the like. To properly perform such an audit requires training and experience in the examination of loan documents, a working knowledge of the Federal lending laws, and an eye for particularized violations of these laws.

These audits, if properly performed, can and have proven to be very valuable in mortgage foreclosure defense. An attorney often does not have the time to devote to an examination of a client’s loan documents and, being an attorney and not an auditor, may not have the right eyes to pick up on all of the particular violations within a set of loan documents which a trained and experienced auditor is able to see and in less time.

A proper audit can greatly assist your attorney with your foreclosure defense, saving the attorney many hours trying to find what the auditor can find in a fraction of that time. The audit also provides the attorney with pinpointed violations as to specific provisions of the detailed Federal lending laws, which will aid the attorney in drafting court papers in the defense of a mortgage foreclosure proceeding.

The problem is that there are many people who are suddenly holding themselves out as “mortgage loan auditors” who have little or no training or experience in performing such audits, having simply located some information on the Internet and now believe that they are qualified to perform an audit. Utilizing an unqualified auditor may wind up not only costing you significant dollars, but may impair your foreclosure defense as well.

Thus, before retaining an auditor, ask for and check on his or her qualifications, training, and experience. Choosing the right auditor can be worth its weight in gold, while choosing the wrong one could cause your defense to have a faulty foundation and also result in the loss of potentially significant remedies to assist you in saving your home and the loss of claims to seek recovery of money damages from the violating lender(s).

Jeff Barnes, Esq.