Perspectives

Was Your Loan Modification Denied?

Declined Loan ModificationWas your loan modification denied? Don’t fret because you’re not alone. Loan modification might be among the toughest things to obtain without help from a lawyer, but some denials are actually easier to fix than others. Below are some options to consider:

Consider Resubmission

Altius Mortgage Group noted that you might consider resubmission if your modification was denied due to one of the reasons below:

  • Missing or insufficient paperwork
  • You failed to resubmit paperwork your lender “lost”
  • You were late in updating your monthly paperwork
  • Missing signatures or loan numbers
  • Inaccurate net present value or NPV
  • Inaccurately verified income

Consider In-House

Denied for a Home Affordable Modification Program or HAMP due to ineligibility? Consider going in-house. A majority of lenders offer loan modification packages that will enable borrowers the chance to modify their home loans. Likewise, if your HAMP application was denied prior to June 2012, you might be qualified for the HAMP Tier 2, says a home loan consultant in Salt Lake City.

Are you Certain that your Ratio was Accurate?

If you believe or know that you’re qualified for a loan modification, but was unsure of how to accurately structure your ratios — net present value or debt to income (DTI) ratio — when you applied, you might have inaccurately presented these ratios in your application, which led to your denial. Consider getting help from a lawyer to handle the structuring for you.

Other Options to Consider

If your mortgage lender states that you’re simply incapable of affording your mortgage, regardless of the type of modification you could potentially get, you have other alternatives. Consider a short sale if your property’s worth is less than your loan. With a short sale, your lender will release you from your loan debt in exchange for the profit made from the sale of your property. You could likewise opt for a deed-in-lieu of foreclosure, wherein you give your lender the deed to your home to relieve you of your mortgage obligations. This is so that you could get money from the sale of your property.

Put simply, it’s not the end of the world if your loan modification was denied. Try the alternatives mentioned above and consult different lenders to make sure that you choose the ideal alternative suitable for your specific circumstances.