Comprehesive Mortgage Auditing

Comprehensive mortgage reporting is a very successful tool when auditing for mortgage fraud. As borrowers continue to educate themselves about the game lenders played during the surge in demand for new homes from 2001 to 2007 this kind of analysis not only delves into forensic detail of a mortgage loans origination, but also the issue of profit generated by the securitizing parties and even the length of time the full amount was recovered in relation to amortization of the original lien.

Case after case is a blatant example of fraud covered with fraud dipped in more fraud and rolled in lies. At some point we all must stop piling on mountains of evidence and make sure this evidence is being heard by state and federal court judges in every type of judicial and non-judicial foreclosure state. As an auditor we rely on attorneys to make sure the evidence is presented and used in a way that gets results for betrayed homeowners and wronged investors.

In brief, the lender lent the borrower an amount that was beyond his capacity to repay and sold the loan to a securitization trust thereby recovering the amount it lent to the borrower within just three months of granting. For its part, the trust utilized the MERS System® to cut short the documentation process and skip recording fees, earned tax-exempt income from securitizing this loan, and even if it failed to properly comply with the transfer requirements it is now initiating foreclosure. MERS in turn engaged the services of robo-signers to partially comply with the requirements.

Believe it or not most Americans are convinced checking your mortgage for fraud is malarkey. They think it is some scam where by people try and get their homes for free. Let me be clear, I don’t dedicate my time and sanity to helping anyone who borrowed money to buy a house have the delusion that they don’t need to pay it back. What I do, is make sure what they pay back is what they owe and the entities that are parties in that real estate transaction operated lawfully. A very simple concept yet very controversial.

The motto of any examiner/auditor should always be to have no personal interest in the outcome of an examination and perform their task with the highest degree of professional integrity. All decisions must be exercised with due care and diligence and their conclusions based on the documents presented coupled with information gathered from the most reliable sources that are available. I’ll take that mission everyday.

Working exclusively as a business-to-business service provider, Mortgage Audits Online is able to devote ourselves to providing expert research enabling our clients to achieve results. Whether you are seeking negotiation tools, litigation support or fraud investigation our staff can help. The Mortgage Audits Online team has over 25 years of experience in private banking, accounting, underwriting, securitization auditing, title services and real estate.

 

Understanding Mortgage Finance

In simple terms, mortgage financing is the process of providing finance to individuals and business entities, to secure properties, and the finance is repaid through timely and consecutive monthly instalments.

To understand the mortgage finance process, you must first try to understand the basic idea behind mortgages.

Mortgage – Definition

It is a legal agreement that conveys the conditional right of ownership of an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan with the condition that the conveyance of the title becomes void upon the repayment of the debt.

Are Mortgages Legally Enforceable?

Yes, they are. In order to be legally enforceable, the mortgage must be for a defined period, and the mortgagor must have the right of redemption on payment of the debt or on before the end of that term.

Why is Mortgage Finance Common?

Here is a list of why it is the most common type of debt instruments:

>> They have a lower rate of interest (because the loan is secured);

>> They are straight forward and have standard procedures; and

>> They have a reasonably long repayment period.

What is a Security Document?

The document by which the agreement is effected is called a “Mortgage Bill of Sale” or simply just a “mortgage.”

What are the Common Mortgage Finance Types?

Real Estate Mortgage – Virtually any legally owned property can be mortgaged, although real property (land and buildings) are the most common.

Chattel Mortgage – When personal property (appliances, cars, jewellery, etc.) is mortgaged, it is called a chattel mortgage.

Second Mortgage – There are situations where it is possible to obtain finance when there is already an existing mortgage associated with the property. It is not unusual for real estate laws to require that the holder of the first mortgage agree to the creation of a second mortgage.

Who has the Right of Possession?

For real property, vehicles, and equipment, etc., the right of possession and use of the mortgaged item normally remains with the mortgagor. But, the mortgagee has the right to take possession at any time to protect his/her security interest.

What Happens in the Event of a Default?

In the event of a default, the mortgagee can:

>> Appoint a receiver to manage the property (if it is a business property), or

>> Obtain a foreclosure for a court to take possession and sell the property.

Glossary of Common Terms Used

Mortgagor – the borrower of funds

Mortgagee – the lender/credit provider of funds (e.g. a bank or credit union, etc.)

First Mortgage – a mortgage that has priority over all mortgages and liens except those imposed by law

Second Mortgage – a mortgage that is subordinate to a first mortgage

So, now that you have read this information guide, you should have a good basic understanding of mortgage finance. It will help you in obtaining the right finance for your real-estate property.

Singh Finance can help you in obtaining low rate home mortgage finance [http://www.singhfinance.com.au/]. The firm’s expert finance brokers will understand your situation and help you in obtaining several loan packages like vacant land loan [http://www.singhfinance.com.au/residential-finance/vacant-land-loans], home loan refinance and construction loan. Call on 0424 190 908 or enquire online now.

 

How to Make Your Financial Planner Work for You

Financial planning is an important part of any individual or business success. Staying in complete control of your money, knowing your incoming and outgoing and being able to forecast for the future can provide you and your family with peace of mind moving forward.

A financial planner enables you to set realistic financial goals. These goals must be realistic in terms of income and expenditure. It can also help you determine timeframes in which to reach the goals, helping you manage your cash flow effectively and stay in control at all times.

The advantage of a financial planner helps you understand the effects of all your financial decisions. You will be able to identify risks quickly, determining if you are making the right choice or not. As a business owner you may have a demand to expand, knowing your finances can help you decide if now is the right time to take on the expense of a new building or whether it could leave you in financial ruin.

The same applies to individuals. You may have been dreaming of a new car for years and have worked out the monthly repayments. Having instant knowledge of your cash flow each month can help you determine the risk level of taking on additional debt at this time.

Over time you will learn how this process can help you re-evaluate your finances. It’s important to stay up to date, checking back regularly to see how you are doing in terms of the goals and timeframes you have set yourself along with any forecasts you may have worked out, helping you plan better for the future.

With this type of planning you will be able to spend in line with your income, reducing the risk of overspending and finding yourself in debt. While debt is very easy to accumulate, it’s much harder to get out of. This means that knowing what you have available each month can not only help you with your monthly expenditure budget, but can also help you with investment decisions and so much more.

As your plan continues to grow month to month, you will soon learn where you are going wrong and have the opportunity to rectify errors you are making in your financial future. You are able to maximize your money, an important element for both businesses and private individuals.

When struggling with your money, it may be worthwhile hiring the services of a professional and experienced financial planner who can sit down with you working out your income and expenditure and showing you ways to maximize your money, reduce your debts and put you on the right track moving forward.

When hiring a financial planner, there are some important factors you will want to take into consideration. If you have been trying to manage your income and expenditure and still find that you can’t make ends meet, then these professionals may be the solution you are looking for.

Financial planners have the knowledge and experience to help you increase your money by lowering your expenditure through various methods of tried and tested solutions. The good news is that they can provide you with ways to relieve your debt quicker, giving you more cash flow monthly.

They are able to assist you in forecasting your financial future, setting realistic goals which are easily achievable and that make a different to your situation. Ensure that any financial planner you choose to use has a good reputation and years of knowledge and experience. They should be willing to work alongside you, showing you where you are going wrong and helping you achieve financial success.

 

The Elements of Mortgage Processing

The mortgage industry is facing challenges of increased regulations and business instability. Entrepreneurs are looking for new and improved methods to achieve the business objectives in a better manner. In order to better the mortgage process, service providers are ready to extend their help. By collaborating with a mortgage service provider, organizations can reduce the total loan processing time, manage or control the costs better and enhance the service level.

Why do the entrepreneurs need an outsourcing firm?

The third-party outsourcing firms have years of experience and knowledge in this domain. With IT integrated solutions and proven skills, service vendors deliver measurable outcomes. This results in higher business scalability, drives sales conversion and increases the process quality and efficiency. Besides, the third-party vendors offer a wide variety of loan services.

Mortgage process service offerings:

• Underwriting research
• Pre-foreclosure
• Sales
• Foreclosure
• Loan modification
• Data management
• Analytics
• Collections
• Customer service
• Loss mitigation
• Bankruptcy, fraud & risk management

An outsourcing firm enables the financial institutions to thrive for success by establishing a certain environment and operational levers to tackle the issues of the industry such as capacity, regulations and cost.

In order to improve the overall efficiency of a business, service vendors standardize and structure processes. By assessing the loan processing functions of an organization, service providers identify the operating areas which can be outsourced. Entrepreneurs consider outsourcing as a strategic step to increase business productivity & reduce costs. Service providers undertake end to end credit analysis and other similar functions.

The Business Advantage

Service vendors have an in-depth knowledge of the market regulations and required licenses. The outsourcing team of dedicated mortgage professionals helps global clients, across various offshore engagements. In addition, the outsourced mortgage professionals are trained in end-to-end loan processing, documentation & underwriting, risk management & closure, etc.

Outsourcing firms have their own loan compliance department, that keeps an eye on the market regulations and licenses. Outsourced loan research team keeps the group updated with the trends, market dynamics and current issues in the industry. Besides, there are a lot of advantages of outsourcing a loan service provider.

• Flexible engagement model that caters for all loan transactions
• Integrated solutions with back and front office support
• Transaction based pricing options
• Specialized knowledge on several financial segments

Service vendors offer business consulting as well as planning solutions to consolidate and streamline operations, which ultimately reduces the cycle time.

Service vendors help in reducing capital expenditure. They even empower organizations to leverage the technology-oriented outsourcing services, automate processes, reduce errors as well as enable seamless operations.

 

High Levels of Mortgage Debt in the UK

The media are fond of reporting any suggestion of a crisis in the UK mortgage market and property market with the implication that millions of home owners will have problems paying off the debt secured on their homes. Of particular concern are those with interest only mortgages who will not have the assets available when the time comes to pay back the debt and that inflation will cause disposable income to drop.

However, is the situation really as bad as it is portrayed? Should borrowers be overly concerned about their large mortgage debts or will the problem of excessive mortgage debt affect only a minority of borrowers? Certainly with interest rates at an all time low the cost of servicing a large mortgage has rarely been cheaper so there is the choice to overpay while rates remain low, but how many people take advantage of this option?

The Office of National Statistics reported last year that property debt in the UK was a staggering £847.9 billion, but further studies have revealed that most home owners are not worried by this large mortgage debt.

Less than 15 per cent of people believe that their mortgage debt is too large a burden whereas almost 50 per cent of the British population think the debt secured on their home is ‘no problem at all’. These figures are an indication that, on the whole, the amount of property debt in the UK is not of undue concern.

This can, of course, in a large part be attributed to ongoing low interest rates which make the cost of servicing a large mortgage much easier to bear. But that is not to say that there is excessive debt is a relatively small number of households. However, looking at the wider picture, less than 40 per cent of households had any outstanding debt at all on their home and 50 per cent of those with who do have debt owe less £75,000.

The largest mortgages are, not surprisingly, to be found in London and the South East where house prices are substantially higher than many other parts of the country. But the flip side of that is that London is also the most prosperous area with string economic growth and rising house prices, even during the recession. It is also worth pointing out that the UK is still a very wealthy country and that amount of debt on properties is far less than the amount of equity that home owners have on the whole. It is no uncommon for assets to be many times greater than the debt, which explains why those with a large mortgage are often not concerned about their ability to pay it off, especially those who have owned a home since well before the start of the economic slump.

With the vast majority of borrowers unconcerned by the levels their property debt, even those with large mortgages or even million pound mortgages or more, and with interest rates at rock bottom, home owners are, in fact, benefiting from some very competitive deals. Coupled with the fact that house prices have continued to rise in London and the South East it is not surprising that many people are not worried by their debts.

 

Are Mortgage Lending Criteria Becoming More Flexible?

The various schemes introduced by the British government during the past year or so, such as Funding For Lending and Help To Buy, have resulted in driving down average mortgage rates to below 4 per cent. But what has had a more significant effect on the number of home loans being approved is that banks and other lending institutions have also been gradually making their lending criteria less stringent, making it easier to obtain a mortgage, even for those not in permanent employment.

This is good news for professional workers who typically work on relatively short-term contracts but have high earnings, such as IT contractors. And for the first time since the start of the economic slump, some lenders will now approve a mortgage for professionals such as these providing they meet a minimum income requirement.

There are thousands of highly qualified, experienced professionals who work on a contract basis, often for the whole of their career but since the start of the recession it has been much more difficult for this category of worker (even a high net worth individual) to find a lender who would approve their home loan application.

This relaxing of lending criteria is a sign that banks are at last starting to make more sensible underwriting decisions with a view to helping potential customers. However, self-employed people, or freelancers without a contract,are not benefiting from the relaxed rules and will still have the affordability of any loan assessed based on the last three years’ accounts.

Another sign that banks are becoming more flexible in their approach to lending has been the launch of buy to let mortgage products aimed directly at the ex-pat community who want to buy a property in the UK to let out while they continue to live abroad. Such deals are available right up to a £1 million mortgage and, in some cases even more.

There has been a big rise in demand from expats looking for Buy-to-Let products, maybe as a result of the housing stock becoming more affordable during the economic downturn in relation to salaries. Much of this demand is from people who already own a portfolio of properties rather than first time landlords but have often found it difficult to obtain a UK mortgage because they are not resident in the UK.

As the property market as a whole continues to undergo adjustments to the new economic climate, the Buy to Let market is becoming a specialist area with respect to funding and several specialist lender/mortgage broker partnerships are developing to meet customers’ needs in this area.

New types of property loan deals for ex-pat buy to let customers, for instance, is further indication that some banks and other lending institutions are willing to offer innovative products, especially to high value mortgage clients. Many specialist mortgage brokers in London in particular deal with a large number of British citizens living and working overseas and new products are providing them with a range of alternatives when looking to invest in property in the UK.

 

Fewer UK Mortgage Approvals Despite Low Interest Rates

The number of mortgage approvals in the UK is still at a very low level and fails to reflect the growing opinion that the mortgage market as a whole is beginning to recover. And naturally the knock-on effect of a low level of mortgage approvals is that there are fewer house purchases and the stagnation of the market continues.

What is surprising is that this drop in mortgage approvals comes at a time of falling mortgage rates and a static Bank of England Base Rate. There are also record-breaking fixed rate deals on offer for all customers and particularly for high net worth mortgage customers with large deposits.

Some experts are suggesting that the downturn in approvals is due to less demand from borrowers and not due to the limited availability of affordable mortgages, particularly amongst first time buyers. But, typically, the cause is hard to pinpoint and is obviously affected by seasonal variations throughout the year. Many potential buyers may also be waiting to see how the property market evolves in the coming year and, in the meantime, are continuing to save for a larger deposit and to try and consolidate their existing debts.

While the overall number of mortgage approvals has decreased, what is interesting is that, loans where the buyer has a larger deposit have actually increased and now account for one in every eight loans in the UK. Larger deposits are considered to be those that range from 15 per cent to 40 per cent of the property purchase price.

This information suggests that the UK mortgage market is not yet on the road to recovery. While mortgage rates may be falling, the UK economy continues to struggle and many people simply do not have the confidence in the economy to commit to a major purchase such as a new home, which is such a long-term financial commitment. Nevertheless, falling mortgage rates, which continue to break historical records, have been credited with the increase in demand for home loans even though many of these applications are not approved.

The large mortgage market has seen a range of record-breaking deals over the past year with examples such as two-year fixed rates for high value mortgage clients at less than 2 per cent. Such mortgages are often only available to those with a 40 per cent deposit and many also come with arrangement fees of up to £2,000. Even so, they are still very attractive deals for those with a large enough deposit, or enough equity in their existing homes, to qualify for one.

Such low rate deals will not only appeal to those looking to move home but also homeowners who want to remortgage while remaining in their current home. Many people considering remortgaging could come from other lenders who are not offering good deals to existing customers or who, in some cases such as the Bank of Ireland and the West Bromwich building society, are actually increasing their rates unfairly for existing customers. Whatever the reason, it is clear that only those seeking a large mortgage and with a large deposit in excess of 15 per cent are in a position to take advantage of the low mortgage rates on offer.