There can be several reasons why one homeowner’s loan modification application is denied, while another’s is not. Whether it’s a Home Affordable Modification Program application or a private one, you need to contact your lender and ask why yours was rejected. Bear in mind that you may not get an answer the first time you call. Be persistent until you get the answer you’re looking for.
There are of course a number of loan modification guidelines in place. Here are 4 common reasons why your application was denied, and what do in terms of the appropriate action to take in each scenario.
- Lack Of Proper Documentation:
This can be easily rectified. Find out from your lender exactly what documentation was missing from your application. Make sure that you are clear on what is needed. Then all you need to do is prepare and submit whatever documents were missing, and reapply in accordance with HAMP or in-house loan modification guidelines (or the relevant private mortgage modification guidelines, if applicable).
- Denied Because Of Your Income:
It’s common for a homeowner who has lost their employment to apply for a loan modification. Without income, they are unable to make their monthly mortgage payments. A lender may deny an application due to insufficient income. In this case, try getting employment elsewhere as quickly as possible. Of course, in difficult economic times like we currently find ourselves in, this can be far easier said than done. However, if you’re trying to stay in your home and income is an issue…you’ve got try and find employment as best you can. There’s unfortunately no easy way around this issue. Best of luck to you too!If that’s simply unachievable for the present, consider asking other members in your household who are earning an income to apply for the loan modification with you. This way their income can boost your application when you reapply.
- Hardship Letter Not Acceptable:
If your lender tells you that you were denied because of something you wrote in your hardship letter…it’s time to get pen and paper and start all over again. Remember that you must be able to support your hardship claim with documented proof. Ask your lender what the specific problem with your hardship letter is. If it’s documentation related, determine what you left out and include it when you reapply.Make sure that your situation qualifies as an acceptable hardship before you apply. Examples of recognized hardship for this purpose are (check with your lender or a loan modification specialist regarding more comprehensive details): Divorce, Death of a spouse or other family member, Job loss, Excessive debt Medical Bills, and others.
- Claimed Expenses Don’t Add Up:
If you’re sure your figures related to your claimed expenses are correct and that you should qualify, ask your lender if you can meet with them to go over your documents line by line. Lender representatives are only human, and humans make mistakes. This is especially of calculating financial statements. Ask them to show you exactly where the problem is, then go over it again with a fine-toothed comb. If you do discover an error on your part, make the necessary correction(s) and then reapply.
Now you have a good idea why your loan modification may have been denied and what to do to apply again and increase your chances of qualification. Please make sure to also contact your lender to find out why your application was denied according to their guidelines and their perspective as the four reasons listed above may not be your case.
You also know that there are several ways to fix any problems before reapplying. Fortunately, 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” should instead in this case read as, “If at first you don’t succeed try, try, again and again and again!”
You’ve spent a lot of time and energy gathering documents, writing your hardship letter, and doing everything you needed to apply. You may be applying on the basis of Chase loan modification guidelines or Bank of America loan modification guidelines, or whoever the lender in question is. Your loan modification qualification guidelines may be based on the Making Home Affordable program, or not. Application rejections take place, but it’s no reason to give up.
If you need loan modification help, consider a loan modification service that is effective in helping you correct all the problems that got you denied in the first place. You worked hard to buy your home. Now you’ve got to be willing to work even harder to keep it. To do that, you should check out our loan modification software here on MyCaal.com because we have designed it to be extremely intuitive to use. You don’t have to be a financial whizz or to understand complex economic concepts in order to benefit from the empowering features of this online tool. For a very affordable rate of only $98.00, you can increase your chances loan modification helpof qualifying for a loan modification and get it approved by preparing a pre-qualified loan modification application that is illuminated with clarity and accurate information and expectations. With MyCaal loan modification software, you will get a faster and more favorable response from your lender.