Many homeowners believe that their only option when it comes to stopping foreclosure is to sell their home for a loss to somebody who is going to flip it for full value. This is likely because of late night infomercials that have sold the idea, not only to investors but to everyday homeowners as well. It’s become a part of our culture.

However, the truth is, the best option for most homeowners facing foreclosure is to seek a loan modification. But too many homeowners end up signing their rights away and still not getting the best mortgage rates they could get because they deal directly with their lenders. They should be going through an attorney instead.

If you are a loan modification attorney then you may have heard people say they’d rather deal directly with the mortgage company because they won’t have to pay lawyer fees. They may actually get out cheaper by paying you to represent them. This is where you have to sell your services as a loan modification attorney. One way to do that is to offer a free forensic loan audit to your clients and if you find evidence of lender violations in that audit you charge your client then, or roll it into your fees on the back end. When you consider that you get a full refund if no violations are found, there is no risk to you. Make no mistake, however. The surest way to know if there are violations is to conduct an audit.

Back in March, the Obama Administration rolled out its loan modification plan and this news report details seven key points of the plan:

• Homeowners default because they can’t make their payments
• Loan servicers are required to reduce payments to no more than 38% of income while the government will chip in to bring that down to 31%
• Both loan services and homeowners will receive cash incentives for modifying loans
• Only owner-occupied residences qualify
• A loan servicer can make its decision on which loans to modify by putting a property through a “net present value test”
• Incentives will be offered to life second liens
• There is an expected increase in foreclosures among investment properties

While some parts of this plan are still murky, it does show some promise to save many homeowners from defaulting on their loans and being foreclosed upon. But these homeowners will still need to get a forensic loan audit in order to prove to their lenders that they qualify and deserve a modification to their loan.

The important thing for homeowners is that they can get relief from their oversized income-to-debt ratio. Most homeowners default on their loans because they can’t afford their monthly payments. As Warren Buffet has stated, it isn’t because the value of the home has declined. Most homeowners recognize the need a place to live and the best place is where they currently reside. So if they can have their monthly payments reduced to a comfortable level, they will keep their home and stay there while continuing to pay on a losing proposition.

When it comes to lender violations there are more than one. In fact, there are a ton of violations that a mortgage lender can be guilty of at any moment. Not all of them are intentionally on the scam level. Sometimes there is just an oversight in paperwork arrangement, but that oversight, as innocent as it is, could cost the lender thousands of dollars in fines and/or lost interest on principle. That’s why you, as an attorney who performs loan modifications, must be on the lookout for your client’s business. If you can identify any one of those oversights in paperwork then you have leverage to negotiate for better terms.

Your client likely doesn’t want to give up his house. He just wants a more comfortable debt-to-income ratio. And if you can help him get that then his life will be better for it. Likewise, the mortgage company likely doesn’t want your client’s house. They want a borrower who pays on time and pays the amount due in full. They want a lifetime customer. You can provide both by renegotiating the terms of the contract and getting them both what they want. But sometimes lender’s can be uncooperative despite the clear facts. That’s when it is time to pull out all stops and get all the evidence you need to walk in with confidence and factually present a case to make a fair loan settlement more attractive to the lender. The one tool that can help you do that better than any other is a forensic loan audit.

Not all loan terms are equal. You know that. And the client is feeling it. The mortgage company wants to negotiate a better deal. They just don’t know it yet. Convince them and everyone will be happy. Use the loan audit as your negotiating instrument. It works.

What is the best way to form a loan modification case? Do you know your opponent’s weak spot? Consider that most mortgage companies have a lawyer on staff or on retainer, and it’s likely the same one who approved their documents, and you walk into a loan modification case the underdog. Even if you’re experienced at doing loan modifications.

Still, there are things every attorney performing loan modifications should know.

1. Not every case deserves litigation
2. When litigation is necessary, you’ve got to have your evidence lined up early
3. The best leverage for negotiation is a forensic loan audit
4. Accuracy is the most important thing in a mortgage document review
5. To get the best loan settlement for your client, you need a team - don’t do it alone

Attorneys performing loan modifications need resources. Why not use the company with the longest and best track record? Full money-back guarantee if nothing is found in your document review. Get more information about loan audits and resources for attorneys performing loan modifications.

When it comes to litigation loan modification cases there are plenty of areas for a smart attorney to focus on in order to win the case. Here are a few areas you can focus on and make sure you have the facts before you step into the court room:

• What is the source of the funds being loaned?
• Is the promissory note collateralized or pled to a third party?
• Was the note converted into an asset-backed security without authorization?
• Is the alleged loan real?
• Did the borrower receive valuable consideration, and when?
• Did the lender follow GAAP in all matters of finance?
• Did the lender include all appropriate disclosures on time?
• Where are the servicers, assignments, and holders in due course?
• Was the mortgage serviced in accordance with the mortgage terms, promissory note, and/or deed of trust?
• Were any late fees charged or collected?
• Were any attorney fees, interest, or other questionable charges added onto the loan amount?
• Did the servicer’s attorney act in bad faith?

These are just a few of the areas that a good attorney might look at to see if there are any litigation opportunities when a client comes looking for a loan modification.

If you are an attorney who performs loan modifications then you are probably already familiar with the benefits. If you are looking to get into modifications then this will help you. There are 4 primary ways a homeowner can benefit from a loan modification. They are:

• Lower interest rate
• Longer amortization period
• Payments amended
• Loan balance reduced

Which method is right for your client depends on a number of factors. But there are benefits to each method.

With a lower interest rate, the homeowner will pay less interest over the life of the loan. Payments may or may not be lower.

With a longer amortization period your client’s monthly payments will be lower, however, the interest rate will likely not change.

With amended payments the borrower will be paying less each month. The interest rate stays the same and the amortization period likely stays the same as well.

A reduction in the loan balance can result in lower payments, but that depends on whether it is coupled with a shorter amortization period or lowered interest rate.

The best way to tell whether a loan modification can help your client, and which method you might want to pursue, is to request a loan audit. No sense in getting into a firefight without your ammunition.

Unscrupulous lenders may know your rights better than you do. That’s why they are notorious for holding their cards under the table. One such card if your right to rescission.

A mortgage document rescission is a voiding of the contract. In essence, when you exercise your right to rescind your loan you are telling your lender that you do not intend to make any more payments and that you expect a full reimbursement of all monies you have paid on your loan. It’s as if your loan never was.

Under certain circumstances, you have a right to rescind your loan. But the Truth In Lending Act does give you the option of waiving that right in emergency situations. That’s why some lenders are approaching their borrowers with a “loan modification” plan and requiring, as a condition of the modification, that the homeowner sign a waiver of their right of rescission. Before you sign that waiver, consider your future rights. You want it to use it down the road.

These lenders don’t care about your welfare. They are trying to protect themselves. They know that their violations of your mortgage contract could result in them having to pay back everything you have paid them - interest and all - on your loan and they could be subject to some hefty fines on top of it. Their solution is to get you to waive your rights so they can slip a substandard modification plan before your eyes and make it appear as if they are helping you.

Instead of falling for this scam, seek a third-party loan audit, which will uncover any lender violations in your contract. That will give you the leverage you need to negotiate a real settlement with your mortgage company and get a fair deal.

There are various methods available to homeowners when it comes to stopping foreclosures. You don’t have to listen to those shady real estate investors who tell you to sell their house to them for a discount so they can walk away with a profit. You have other options.

One option that is gaining popularity these days is loan modification.

A loan modification is a renegotiation process between a lender and borrower that results in a change of the loan terms. You most often hear about the loan modification process when a homeowner is behind on payments. But that isn’t the only time you can use a loan modification. You can also request a loan modification when your lender has violated federal law.

But if you are behind on your payments then that is a good time to renegotiate. What do you do if your lender refuses to modify your loan? You request a loan audit and find out if the lender has violated any laws or made any errors in processing your paperwork. If so, your lender will be more likely to renegotiate your terms and give you that loan modification. So if you are behind on your payments and facing foreclosure, order a loan audit to see if you can force your lender’s hand.

Not all loan modification cases will end up in litigation, but if yours does then you’ll want to have all the information that you can get to prove your case against your lender. The more evidence you have in your favor, the more likely you are to get a favorable ruling and the more likely you are to get a fair and equitable loan settlement. That’s why a forensic loan audit can be your best discovery tool.

But you do have to be careful about where you go for your loan audit. Not all loan audits are as forensic as they are made out to be.

What I mean is, if your loan auditor uses a computer program to find errors or violations in your loan documents then your audit will not be nearly as accurate and comprehensive as if you had human eyes looking it over. The best forensic loan audit, without a doubt, is done by a real person with real knowledge of mortgage and loan case law. When you have an auditor perform a mortgage document review there will be know doubting that your loan audit was worth every penny spent on it because you will no without a shadow of a doubt if your lender has violated any applicable case law. Peace of mind - isn’t that what you really want?

If you’ve never had a mortgage document review, it’s quite a process if done right. Too many companies today calling themselves loan modification experts are too quick to take your money and run your mortgage documents through a computer. Unfortunately, a computer can’t find as many errors as a human who is familiar with all the applicable laws can. That’s why U.S. Lender Audit can boast of having the most comprehensive loan audit on the market.

It’s a shame that more homeowners don’t a request a mortgage document review. When 83% of mortgages in existence contain lender violations, a lot of homeowners could come out of the review with the tools necessary to win a fair loan settlement.

A fair and comprehensive mortgage document reviewer will examine every document you signed at closing as well as all of the Title documents and disclosures to make sure that your lender followed every applicable state, local, and federal law and if anything - anything! - was left out of the process, a competent reviewer will find it. That’s why requesting a loan audit is a winning action on your part - the chances of your loan having errors are great and if there are errors the chances that you’ll receive a fair loan settlement are even greater. There’s really no way to lose.