Forensic Loan Audit Loan Number: Current Servicer: John Doe and Jane Doe Address Rateswire.com Predatory Loan Test Grade: FAIL Disclaimer: Rateswire.com is not a law firm and this audit is not to be construed as legal advice. Rateswire.com makes no guarantee of any kind as to the usefulness or accuracy of results in this audit. Rateswire.com assumes no liability whatsoever for any incorrect findings in this audit. Rateswire.com Predatory Loan Test is an opinion of the auditor of the amount and degree of predatory lending acts apparent within oral and written documentation provided, with PASS exhibiting little to no predatory acts, and FAIL exhibiting the multiple or severe predatory lending acts. © Page 1 It is always the opinion of Rateswire.com thaat you s seek legal counsel for any legal questions and/oor legal problems arising in your loan. Parties Involved in Transaction (not comprehensive) “Borrower”: John Doe “Co-borrowerr”: Jane Doe “Borrowers”: John Doe and Jane Doe “Lender”: X Mortgage “Servicer”: X Servicing Company “Mortgage Broker”: N/A “Appraiser”: X Appraiser “Real Estate Agent”: N/A “Title Company”: X Title “Escrow Company”: X Escrow “Title and Esccrow”: X Title and XX Escroww “Seller”: Parents X and Y of John Doe © Page 2 General Description of Events: Seller wanted to sell their property to their son and his wife, borrowers. Multiple lending companies prudently turned down application for borrowers to purchase home. Lender agreed to make loan on a business baank statement program. Lender made the loan while unlicensed to do so. Loan subsequently went into default due to an excessive Debt to Income Ratio (DTI). Borrowers engaged Lender/Servicer to cure default through a repayment agreement. Servicer told borrowers multiple times to cancel repayment engagement and apply for a Making Home Affordable loan modiffication. Borrowers canceled their repayment plan that they had been paying as agreed. Servicer began foreclosure on borrowers, and denied borrowers Making Home Affordable loan modification stating that their loan owner never gave them authorization to do a Making Home Affordable loan modification. Servicer refused to allow borrowers to restart repayment plan. © Page 3 Predatory Acts and Damages to Borrower 1) Unlicensed Activity. Lender’s was not authorized to make mortgage loans in the state. The expired license can be seen in hyperlink: www.fakeurl.com . Borrower appears damaged by an amount equal to all costs and ongoing interest charged, which lender was never licensed to charge. 2) (Negligent) Misrepresentation. Lender represented that borrower’s business bank statements should be used as income and that borrower could afford payment. Borrower was an unsophisticated borrower and relied on Lender’s representation, which appears false. Lender sshould have knoown, butt as evidenced bby Lendeer’s 60%++ default rate at the time, Lender did not t know that business bank statements should not be used as income for insolvvent, reccently bankruptt, and firrst time home borrowers. Borrower appears to be suffering ongoing credit and foreclosure related damaged due to Lender’s misrepresentation. 3) Fraud. Lender knew it was unlicensed and could not legally attach a legal description to mortgage subject property in state. Lender attached a blank legal description accordingly. Lender is foreclosing on a fraudulently added legal description not acknowwledged or seen by borrower. Borrower appears to be suffering © Page 4 ongoing credit and foreclosure related damages from the foreclosure proceedings on a fraudulen nt Deed of Trust. See attached Deeds of Trust as Exhibit A. 4) EExcessivee DTI (faailure to use reasonablee care)(innability for borrower to ever receive benefits or fulfill mortgage contract). Lender’s general lack of reasonable care in uunderwrriting is eevidenceed by a ddefault rrate oveer sixty times that of the 1% default ratee for other professional lenders in the field. Lender’s lack of reasonable care is specifically shown in that Lender approved a business bank statement loan at a debt to income ratio (DTI) above the 43% FHA standard limit. The loan had payment adjustments in excess of 50% of borrower’s income on business bank statements, before taxes. Borrower was of a special unsophisticated and fragile class that should not have been given a loan at such a high DTI, as borrower was insolvent, first time homebuyers, and recently went through bankruptcy. Borrowers appear damaged by destruction of credit, impending loss of equity, and impending loss of family home due to obtaining a mortgage they should not have been granted. Borrower appears to be suffering from a foreclosure due to Lender’s lack of care and providing a mortgage that Borrower could not afford. © Page 5 5) Breach of Contract. Servicer specifically instructed borrower on multiple dates, including August 12, 2008 to cancel the repayment plan and stop payment on the mmortgagee in ordeer to apply obtaain a Maaking Hoome Affordable loan modification instead. Borrower is currently suffering from foreclosure proceedings and ccredit daamages ddue to foollowingg Serviceer’s instruction and inducement to breach the mortgage (repayment agreement) contract. See borrowwers repayment agreement and payments on same as Exhibit B. 6) (Negligent) Misrepresentation. Servicer specifically instructed borrower to breach contract with Lender. Servicer was in a position to know borrower’s loan was not approved by investors for Making Home Affordable. Borrower was damaged for relying on Servicers false statement to cancel his repayment plan as above in 5. See servicer’s statement that loan was not eligible for Making Home Affordable due to a lack of investor authorization as Exhibit C. © Page 6  Notes and Disclaimers: The categories above represent auditor’s opinion of what happened and are not significant in any other way. Please consult your lawyer as to the legal significance of the predatory acts above. © Page 7