A: Oh that's easy.... I examined their sophisticated website (very nice!) and sample audits. Their audit is a check-off list performed for screening purposes. Their audit itemizes the disclosure violations under Reg. Z 226.17 (General Disclosures) and 226.18 (Content of Disclosures). These 2 sections of the regulation provide statutory penalties with a 1 year statute of limitations. I noticed their description of "Serious" when in fact some of their RESPA citations have no penalty, or no private right of action. I am clueless as to what "Serious" means. Nothing in RESPA provides a basis to cancel or rescind the transaction. I examine the closing loan documents looking for rescission, a three- year (3)statute of limitation.
The forensic audit I do provides the consumer with a mathematical computation and determination of how the lender disclosed the amounts in the TILA Disclosure Statement. Accordingly, if the amounts are improperly allocated, then the TILA Disclosure Statement is inaccurate. Whether the inaccuracy is within the tolerance is also assessed. I also show you my calculations and identify who got what money at the closing and whether the fees were properly allocated based upon TILA; Reg. Z requirements. I do not perform check-off list audits, rather I am looking for “Material” disclosure violations sufficient to rescind. Nothing in Reg. Z 226.17 or 226.18 or a check-off allows rescission. See 15 USC 1602(u); Reg. Z 226.23, and 15 USC 1635(a) for rescission requirements.
In order to complete my audit, one must understand the applicable interpretation of the statute, regulation, the computational accuracy of the TILA Disclosure Statement, and present it in a simplified manner. In addition, I publish the audit with statutory citations and case law to support my position. Therefore, the audit report may appear complex to a lay person but will withstand scrutiny by any legal authority. The issue is merely an academic exercise that separates me from the rest of these folks.
It must be noted that the transaction must meet the elements of TILA rescission. I do not accept audits unless the transaction meets those elements. Disclosure violations considered "serious" do not make my criteria. If you need a survey of questions that must be answered prior to a forensic audit, do not hesitate to call me. I hope this helps you and look forward to any concerns you may have.