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Foreclosure and Loan Modification Blog

Why Were You Denied A Loan Modification After Making Trial Payments?

Having your application for a mortgage loan modification accepted typically means being required to make a series of trial modification payments to prove you're able to pay your mortgage again. Passing that test means you're most of the way to your goal to a permanently modified loan.

But, even after making trial modification payments, some homeowners are still denied a permanently modified mortgage.

Here are some reasons that could happen:

3 Common Wells Fargo Loan Modification Problems

If you're having problems with your mortgage, it's a good idea to communicate with your bank to see if you can work with them for some sort of agreement to stay out of foreclosure.

Your bank can choose to give you an unemployment forbearance that temporarily suspends your mortgage payments because of a job loss, for example. Or, if you're already behind on your mortgage payments due to a hardship, you may be able to get a loan modification that reinstates your mortgage with a more affordable payment.

Loan modifications are the only option many homeowners have to keep their home. The terms of the loan, such as the length of the loan, the interest rate, and the principal balance can be changed.

Loan modifications are a life saver for those who get them. Unfortunately, many Wells Fargo borrowers end up disappointed when they don't get the results they're looking for after trying to deal with the bank on their own. And Wells Fargo has a reputation as one of the most difficult banks to work with for a loan modification.

Attorney Demands Bank Proves Reason For Denying Loan Modification

Disclaimer: These results should not be taken as a guarantee, as each case is unique. We have helped over 7,000 homeowners, here is one of their stories.

Everybody needs help from professionals sometimes. That's especially true for people trying to save their home from foreclosure. Despite many homeowners best efforts, they're not able to get the results they want on their own because they lack the knowledge and experience needed to do so, and the consequences of failure are unacceptable. So they seek outside help.

That's the case with a recent client of ours who retained us to help them avoid foreclosure. To protect their privacy, let's call this couple the Livelys. The Livelys have a home in Bronx County, New York and they fell behind on their mortgage payments in August of 2013.

Solo Loan Modification Attempt

Since they wanted to keep their home, but didn't have the massive amount of cash ($91,251.00) needed to reinstate their loan, the Livelys applied for a loan modification which, if successful, would have gotten their loan back to normal and eliminated the threat of foreclosure. They submitted an RMA (Request for Modification Assistance) to Ocwen, their mortgage loan servicer.

Simple Mistakes Delay Approval of Loan Modification

A loan modification is the only thing that keeps the homeowners who apply for it from losing their home to foreclosure. It permanently lowers their monthly payment to an affordable portion of their income and enables them and their family to continue living in the home that they know and love.

So, given the work it takes to apply for a loan modification, the cost of hiring an attorney, and the prospect of foreclosure, you'd think that no one who has been approved for one would fail to follow the simple instructions for finalizing the agreement. But it happens all the time, and it prevents or delays the final approval of a modification.

Why You Aren't Getting the Help You Need to Avoid Foreclosure

 

Some problems in life are too tough to handle on your own. They're too complex and are outside of your areas of expertise. To address those problems you have to get help from someone who understands your issues from the inside out. Nowhere is that more true than for homeowners facing foreclosure.

But how do you even know what type of help you need, what options to pursue, and who to turn to? Many do it by trial and error...

Loan Modification vs. Refinance, What's the Difference?

So your mortgage payment has become more expensive than you would like it to be, and the house isn't worth what it used to be.

What are your options to improve things?

It depends on the specifics of your situation and what your goals are. If you want to keep your home, you can try to get the monthly payment lowered to a more affordable level. There are a couple ways to do that. Two of the most common are refinancing and loan modification. But which is right for your situation?

Why Is My Loan Modification Denied?

Editor's note: This article was originally published March 2013, and has been updated in August 2015.

So you've recently had your loan modification denied and can't figure out why?

You’ve handled tax forms; you’ve filled out car applications, job applications, and credit card applications. And a loan modification is just another application. Are you thinking to yourself: How hard could it be? Unfortunately, a loan modification might be the hardest thing to get approved without the help of an attorney.

Ask yourself this question: Do you know your DTI “debt to income” ratios? Your Net Present Value (NPV) and how to structure it?

What about organizing and keeping track of all of your final loan modification papers to ensure that nothing is left out?

What Can You Do If Your Loan Modification Is Denied? [Slideshow]

If your loan modification was denied, don't worry: you're not alone. Loan modifications may be one of the hardest things to get approved without the assistance of an experienced attorney. After denial, your next step will depend on the reason why you were denied and where your home is in the foreclosure process.

Loan Modification Success: Ocwen Mod Makes These Homeowners Smile

Disclaimer: These results should not be taken as a guarantee, as each case is unique. We have helped over 5,000 homeowners, here is one of their stories.

If bad lending and greed made the foundation the foreclosure crisis was built upon, then its two pillars were long-term unemployment and footdragging by the banks. This homeowner and his wife had experienced all of these aspects of the foreclosure crisis, but with our help, they were able to right their lives again and get back on track to a bright financial future.

What Can I Do If My Loan Modification Is Denied?

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 attorney's assistance. After denial, your next step depends on the reason why you were denied and where your home is in the foreclosure process.

About this Blog

Amerihope Alliance Legal Services is a leading loan modification and foreclosure defense law firm with attorneys licensed in 5 states. We have helped over 7,000 homeowners fight back and keep their homes.

Click to Read Our Super Loan Mod Success Stories

Our goal is to provide valuable information to help homeowners who are trying to obtain a loan modification or to stop foreclosure. You may schedule a free consultation at any time.

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