A forensic audit is a specialized branch of accounting. The auditor delves into the financial records of an individual or firm with the intention of finding evidence of impropriety or criminal activities. The ultimate aim is to use any evidence unearthed as a basis for filing a lawsuit or criminal charges against the defendant in question.
This field of accounting can be initiated as a proactive exercise or a reactive measure. The proactive one may be used by a company for fulfilling compliance regulation requirements, or as a diagnostic tool that helps them determine the efficiency of their financial oversight system. A large accounting firm is expected to maintain a separate department to handle annual auditing requirements of each client's financial records.
However, it is the reactive type which is of more importance. This is where the auditor is required to find evidence to backup allegations or suspicions of a criminal nature. If the auditor finds said evidence, then the prosecuting attorney may be able to use it to build a stronger case against the defendant.
Its application in the field of mortgage lending is getting a lot of attention right now, mostly because the subprime mortgage crash laid bare the facts about mortgage lenders nationwide. It seems many have been engaging in dishonest and sometimes downright fraudulent procedures which resulted in the real estate crash that cost millions of people their homes. Home owners in turn have been filing cases against lenders to combat foreclosures.
It is therefore not surprising that everyone who is being foreclosed wants to take a legal shot at suing the lender. The hope is that the lender, when faced with a lawsuit, may be more amenable to agree on a loan modification package. Of course, it is nowhere as cut and dried as this. But it cannot be denied that a home owner being foreclosed has a lot to gain and nothing much to lose by filing a lawsuit against the lender.
Unearthing hard evidence of fraud or violation of a real estate law such as RESPA (Real Estate Settlement Procedures Act) requires a securitization audit. Every bit of paper and all the digital records associated with the mortgage, right from the initial offer to the closing, have to be checked. Legal and auditing professionals in New Jersey are handling a lot of such cases these days.
A team of professionals, such as a loan modification New Jersey lawyer and an auditor, works in tandem with the home owner to zero in on paperwork errors or illegal short-cuts taken by the lender. If there is something wrong with the paperwork, the forensic audit will unearth it. Even the threat of a lawsuit will then be enough to provide the leverage required for a loan modification or perhaps a complete write-off of the mortgage balance.
This field of accounting can be initiated as a proactive exercise or a reactive measure. The proactive one may be used by a company for fulfilling compliance regulation requirements, or as a diagnostic tool that helps them determine the efficiency of their financial oversight system. A large accounting firm is expected to maintain a separate department to handle annual auditing requirements of each client's financial records.
However, it is the reactive type which is of more importance. This is where the auditor is required to find evidence to backup allegations or suspicions of a criminal nature. If the auditor finds said evidence, then the prosecuting attorney may be able to use it to build a stronger case against the defendant.
Its application in the field of mortgage lending is getting a lot of attention right now, mostly because the subprime mortgage crash laid bare the facts about mortgage lenders nationwide. It seems many have been engaging in dishonest and sometimes downright fraudulent procedures which resulted in the real estate crash that cost millions of people their homes. Home owners in turn have been filing cases against lenders to combat foreclosures.
It is therefore not surprising that everyone who is being foreclosed wants to take a legal shot at suing the lender. The hope is that the lender, when faced with a lawsuit, may be more amenable to agree on a loan modification package. Of course, it is nowhere as cut and dried as this. But it cannot be denied that a home owner being foreclosed has a lot to gain and nothing much to lose by filing a lawsuit against the lender.
Unearthing hard evidence of fraud or violation of a real estate law such as RESPA (Real Estate Settlement Procedures Act) requires a securitization audit. Every bit of paper and all the digital records associated with the mortgage, right from the initial offer to the closing, have to be checked. Legal and auditing professionals in New Jersey are handling a lot of such cases these days.
A team of professionals, such as a loan modification New Jersey lawyer and an auditor, works in tandem with the home owner to zero in on paperwork errors or illegal short-cuts taken by the lender. If there is something wrong with the paperwork, the forensic audit will unearth it. Even the threat of a lawsuit will then be enough to provide the leverage required for a loan modification or perhaps a complete write-off of the mortgage balance.
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