What to do if loan modification disapproved?

Recently re-assigned lender's "Investor" says, "Would not suffer that great a loss if home goes into foreclosure."  This despite documented financial hardship and sub-prime mortgage.  Anyone able to take advantage of President's "Home affordable" program with unwilling lender?
  • June 07 2009 - West End
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Answers (7)

Best Answer

If your loan modification was disapproved, here are your options:

1.- Do a short sale,
2.- Declare bankruptcy,
3.- Go into foreclosure,
4.- Try a modification again,
5.- Make the payments somehow.

I know the above are not necessary great options.  Please get advise.  Go to HUD and get a counselor.  Beware of scams and services that charge a fee.

Get the lender to send you a written letter stating the Loan Mod was denied. If you are upside down, then ask the lender if they are approving a short sale and what would that amount may be.  This information may help you sell quicker.

You can also argue and say that they(lender) is forcing you into bankruptcy, and see if they react to that.

I wish I had more advise at this time....



  • June 08 2009
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Profile picture for myFICO
Take a look at this LA Times article re a trustworthy website that can help assess loan modification eligibility http://ow.ly/cYT9.

They may be able to help you articulate your case in a different way that will change your lender's response, and can offer advice as to possible options.
  • June 08 2009
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If your main goal is to save your home and you have the means to make the payment I would advise you to maybe seek legal help.  In my professional opinion the "Home Affordable" program is nothing but the Government trying to play catch up to what the banks have been doing themselves for the last year and half.  A real estate attorney can tell you 1. if your best option is to request a loan modification.  2. Or go with a differnet option like a short sale.....  Contact me with any questions modifications are getting approved!!! Using a Real Estate Attorney is the best option I work with one that offers you 100% money back Guarantee!
  • June 08 2009
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Was the financial hardship caused by an interest rate change or job loss?
If your financial situation did not change since your previous loan was incepted then I suggest you shift your  focus on how you qualified for a loan you can't afford and ultimately suffer losses.
Next, have the bank send you a copy of the denial and write them following this format Cc the following from this list.

Step 1.
  • June 08 2009
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Hi George,

Did you try to speak with a "HUD approved mortgage counselor"?  Their free to counsel with and be able to give you unbiased answers to your dilemma. I would recommend placing your home on the market asap so you can have a "plan b" to fall back on. This will give you exposure and a possible way out if things fall through with a loan mod. Contact us if we can help.

Take care   
  • June 07 2009
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Some of these lenders are playing hardball make sure you look at the loan modification guidelines to understand what it is that makes you a viable candidate, submit a complete package, get a contact name and phone number in the loss mitigation department of that lender and keep fighting.
  • June 07 2009
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Profile picture for MBSCollateral
Go to mbscollateral.com.  I am gathering the momentum to start a fight from a different angle - uniting many homeowners in the situation like yours and collectively approaching lenders/investors.  They can easily "blow off" you, but if there's a 1,000 homeowners like you coming together... then a conversation would be A LOT different (think of it as "homeowners' union".
  • June 07 2009
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