Forensic mortgage analysis: Useful? DIY?

We’re in, I guess, your standard toxic mortgage situation: Tempted with a fixed rate, which was switched to a APR at the last second, told we could just pay interest-only for a while, told we could just pay the “minimum payment”, found out years later that minimum payment isn’t really a minimum payment and that we owe $20k extra, and now, of course, with the market the way it is, our house is quite a bit underwater.

Our loan has been transferred several times and now rests with Wachovia, which was bought by Wells Fargo. Some sort of loan modification would be extremely helpful, since although paying all that interest is great for getting a federal tax refund, it eats up 45-50% of our gross income (and we have another child on the way). However, Wachovia apparently only gives modifications for 2% of all requests, and then only when situations are dire. We can actually pay our loan, but only by forgoing other things, including savings and home repairs.

A friend of ours told us about someone who will do a “forensic mortgage analysis”, where they go over a loan and find anything that’s illegal in the paperwork. If there is, then a bank would be required to make a modification. Is this a useful option? Does it work the way it’s claimed?

If it is useful, would it be something I could do myself? The person I was referred to would charge $800, but would refund half that if no errors were found. Personally, I’d like to save the money and not gamble.

I am not a lawyer, and I’m guessing you are not a lawyer.

Unless you’re well-versed in contract law, and specifically in mortgage and real estate law, how will you know if some provision of the mortgage is illegal?

Have you tried to get a loan modification yet? Making Home Affordable has information on refinancing and modification options.

Given those requirements, I’m going to say that’s a “no” to the DIY part of me question :smiley:

I have been told by a counselor that Wells Fargo/Wachovia will not do modifications unless you are in danger of foreclosure, so I haven’t called them up and asked. I have checked out the Making Home Affordable website before: Being current on payments disqualifies me for modification; not being a Freddie Mac or Fannie Mae customer disqualifies me for refinancing.