Why Was I Denied for a Loan Modification?

Modification of your mortgage loan¹ is an important tool for struggling homeowners to avoid foreclosure and stay in their homes. Unfortunately, some homeowners are surprised to learn that their application for a modification was denied. Denials can occur even if homeowners actually meet all of the qualifications for a modification.

Too many property owners believe that they can handle the application process on their own, without the assistance of an experienced foreclosure attorney. However, mistakes during the application process are a primary reason for denial. The following are some errors that homeowners commonly make on modification applications:

·       You fail to meet deadlines for submitting all of your paperwork.

·       You calculate your income incorrectly for debt to income (DTI) and net present value (NPV) calculations. This is a particular risk for self-employed homeowners.

·       You disclosed sources of income that should not be considered for the purposes of a loan modification.

·       You fail to send all of the requested documentation. Lenders request paperwork with updated numbers on a monthly basis and, too often, documents are mysteriously lost and can be requested again. If you have a full-time job (or two), a family, or other important obligations, you may not have the time and energy to devote to these constant requests for documentation.

·       Your letter of hardship² did not contain the right information. Lenders have specific requirements for “hardship” when deciding whether or not to approve a loan modification. Not only do you have to prove hardship in your latter, but also express your willingness and ability to pay your mortgage if the modification is granted. This balance is often difficult to achieve if you are not familiar with lender policies.

Contact an experienced foreclosure attorney for assistance

All of the above errors can be easily avoided if you contact a qualified foreclosure lawyer for help with the modification application process. At the Law Office of Ronald D. Weiss, P.C., we have helped numerous homeowners obtain loan modifications and avoid foreclosure. If you would like more information on how we can help you, call today at 631-296-0912 for a free consultation.

References:

¹http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/nsc/faqlm

²http://www.nytimes.com/2013/01/06/realestate/mortgages-writing-the-hardship-letter.html?_r=0