Denied Loan Modification: What Is Next?

October 29, 2011 by  Filed under: Loans 

Homeowners are applying for loan modifications in record numbers. Diverse instances have prompted poverty that make paying their monthly mortgage loans troublesome or even impossible. Many have effectively gotten loan modifications approved. But, what do you do if the loan modification was denied? Sad to say, that happens a lot. If you’ve been denied, it’s actually not the end of the world. You may feel depressed and defeated, that’s okay – that’s normal. But now you have to try and shake it off and roll up your sleeves.

Figure Out Why Your Application Was Denied

There can be several reasons why one homeowner is denied while another is not. You should contact your lender and ask why. You may not get an answer the very first time you call. Keep calling until you have the important information. Let us look at a few common reasons why a house owner can be denied and the next step to take in each and every predicament.

If You’ve Been Denied As A Result Of Lack Of Proper Documentation

This could be easily rectified. Find out what precisely documentation was missing from your application. Be certain that you’re clear on what is required. Then find whatever documents you were lacking and re-apply.

Your Lender Denied Your Loan Modification Application Because Of Your Income

It is common for a home owner who has lost their employment to apply for a loan modification. Without having income, they are unable to make their month-to-month home loan payments. A lender might deny an application because of not enough income. In this situation, try getting employment elsewhere immediately. In a down economy that could be easier in theory. Howevere, if you’re wanting to be in your home and earnings are a concern, you’ve got to try and find employment. If that isn’t an option, ask other members in your household with incomes to apply for the loan modification with you. Therefore you can use their earnings when you apply again.

Hardship Letter Not Acceptable

If The lender informs you that you were denied due to something you wrote in your hardship letter – it’s time to get pen and paper and start once again. It’s essential to be able to back up your hardship claim with documented proof. Request your lender what was the problem with your hardship letter. If it was documentation, discover what you missed and include it when you re-apply. Ensure your circumstances is eligible as an acceptable hardship before you apply.


Death of a spouse or other family member

Job loss

Excessive debt

Medical Bills

These are just a few hardship situations that are deemed acceptable. Check with your lender or a loan modification company for additional info on this. Keep your letter to one page…two at the most. Once you’ve rewritten your hardship letter, you may then reapply.

Denied Since The Expenses You Declare Don’t Add Up

Should you be sure your figures when it comes to your said expenses are correct and that it is best to qualify. Ask your lender if you can speak to them and review your documents line by line. Lender representatives are only human and humans make mistakes. Notably when it comes to calculating financial statements. Ask them to teach you particularly where the problem is. Then go over it again with a fine tooth comb. If you indeed find an error, make the desired modifications and then reapply.

Now you have a good suggestion of what to do if your loan modification was denied. You also are aware that there are particular ways to fix the problem and reapply. The good thing is, there is no limit to how many times you can apply for a loan modification. The old saying,” If at first you don’t succeed try try again”…in cases like this should be…”If at first you don’t succeed try try again and again and again!” You’ve spent lots of time and energy getting documents, writing your hardship letter and doing whatever you necessary to apply. Getting denied happens, but that doesn’t mean give up.

If you would like help, consider a loan modification service to help you correct the difficulties that got you denied in the first place. You worked hard to buy your home…now you have to be prepared to work even harder to keep it.

I trust this has been useful for information on loan modification companies, and of course you will discover more on the website itself at, why not go there now and try them out.

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