Your Loan Mod Was Denied…and Yelling Won’t Help If your loan modification has been denied. Be assured: you’re not the first person to experience denial, and you certainly won’t be the last.
Loan modifications may be one of the hardest things to get approved without an experienced Negotiators assistance. After denial, your next step depends on the reason why you were denied and where your home is in the foreclosure process.
If you don’t know the reason already, then call your lender and ask their representative to explain why you were denied. Most of the time, the lenders’ notes are incomplete and don’t give a concise explanation of the situation, and will require a higher-up to explain the situation better. Some denials are easier to remedy than others.
You can Re-submit
Re-submission may be your best option if your loan modification has been denied for one of the following reasons:
- Insufficient or missing documentation
- You fell behind on updating your paperwork with your lender every month
- You didn’t resubmit documents that were “lost” by your lender
- Missing signatures
- Missing loan numbers
- Incorrectly verified income
- Incorrect NPV (net present value)
If you fall into one of these categories, then information will need to be gathered and updated prior to resubmitting for a loan modification.
Your Loan Mod Was Denied…Now What?
Was Your Ratio Correct?
If you believe you were eligible for a loan modification, but didn’t know your DTI (debt to income ratio) or NPV and the optimal way to structure these ratios for your lender, then you were setting yourself up for failure from the get-go. If you’re unsure about how to structure these figures, then it’s best for you to hand your loan modification over to a negotiator who can handle the process for you. An experienced loan modification representative can help you restructure the way your financial situation is presented to give you your best chance at a great loan modification.
Not All loan Modifications are Equal – Go In-House
If you have been denied for a modification because you’re simply ineligible, then it’s time to apply for an in-house modification. Many major lenders offer in-house loan modification programs that allow borrowers to modify their loans. Every lender has their own guidelines for in-house modifications, and you will need to present a loan modification package that is structured toward these guidelines.
Consider Your Other Alternatives to Modification
If your lender determines that you wouldn’t be able to afford your loan regardless of what kind of modification you would get, then it’s time for you to consider another option. There are other options that will allow you to sell your home instead of going through foreclosure.
If your home is worth less than what you owe, then short sale may be your best option. In a short sale, the bank will agree to release you from your mortgage in exchange for the money made from selling the house. Short sale is not automatic or mandated, though- it requires negotiation and approval from a mortgage lender first. Be warned: a lender is still free to pursue a deficiency judgment after short sale; however it is advisable to have an experienced short sale negotiator handle your sale. So they can negotiate a waiver of deficiency judgment during the short sale process for you and thus avoid this pitfall.
Another option is a deed-in-lieu of foreclosure. With this option, you agree to give up the deed to your property, and the bank agrees to release you from your mortgage debt in exchange for the money they’ll make from selling the house. This option can only be pursued if your home has been on the market for 3 months. As with a loan modification or short sale, a homeowner must complete an approval process before this can be used as an option. Take heed: just as with a short sale, a lender can pursue a deficiency judgment after a deed-in-lieu, which is why it is advisable to have an experienced negotiator handle your Deed in Lieu. So they can negotiate a waiver of deficiency judgment during the process for you.
What’s the Best Thing to Do If Your Loan Modification Is Denied?
If your loan modification has been denied, then your overall best option is to consult with an experienced representative before taking any other step to understand what your options are. There are a select group of professionals at Distressed Property Solutions Network that combine foreclosure defense, loan modification services and shortsale experience and their insight will be invaluable in helping you choose the right direction and best of all the consultation is given to you at NO Cost.
Distressed Properties Solutions Network
The Distressed Properties Solutions Network starts our program with a FREE consultation and Situational Property Analysis. During the consultation we will listen to your goals, help you with the reality of the situation and present you options that are in your best interest and in line with your goals.
We have no interest or financial gain by suggesting one strategy or professional over another, except for your best interest.
Foreclosure is a complicated and emotionally draining process. If you are having trouble with mortgage debt, it’s often best to research many options. Distressed Property Solutions Network has access to a team of professionals that work together to help you.
The Network has a documented record of success in matching owners with professionals that utilize all options and strategies. Our mission to do all that can be done to help you accomplish your desired outcome. Stop a sale, defend a foreclosure, find a way to work it out with the bank, short sell or bankruptcy as a last resort. Our team looks at each file as a long term process, and advocates credit repair and rebuilding from day one. You CAN apply for a mortgage with our mortgage partners one day out of foreclosure or short sale. So preemptive work is always in the works if that is the direction you want to go in.
Call for a NO COST in depth review of your situation. The networks legal partners are available to you on the first call ready to work with you immediately.
Local: (847) 543-0202
Toll free: (800) 859-1255