Wachovia modification request was denied

[phil09]

I have been lurking this forum for the last 3 months, as I am helping my aunt modify her loans.

She is in pretty bad financial shape, as revenues from her small business have shrunk drastically with the economic downturn. On top of that, her 9 y-o son has severe medical issues. She has two houses, both of which are under threat of foreclosure.

The loan for her primary residence is with Bank of America. The loan is owned by Fannie Mae, and she was accepted in their HomeSaver Forbearance Program. She has been paying a reduced payment of about half of her normal payment of approx. $1,800. The Forbearance program is in its 3rd month, and she has 3 more months to go. So at least she's got some breathing room on her primary residence.

She also has a vacant rental house, and its loan is with Wachovia. It is not owned by either Fannie Mae or Freddy Mac. My aunt requested Wachovia for a loan modification about two months ago, and just received a denial letter, with no reason given. We had to call to ask for details, and the Cust. Serv. agent told us -after looking up a few things- that it's because this house is not owner-occupied.

From what you all have seen, is the fact that the house is not owner-occupied a usual reason for denials of loan modification requests?

If yes, is there anything we can do to appeal?

Thanks in advance.

[Evan Bedard]

Hi phil09 welcome and thank you for joining.

She also has a vacant rental house, and its loan is with Wachovia. It is not owned by either Fannie Mae or Freddy Mac. My aunt requested Wachovia for a loan modification about two months ago, and just received a denial letter, with no reason given. We had to call to ask for details, and the Cust. Serv. agent told us -after looking up a few things- that it's because this house is not owner-occupied.

From what you all have seen, is the fact that the house is not owner-occupied a usual reason for denials of loan modification requests?

If yes, is there anything we can do to appeal?

Yes it is very common modifications are denied because of the home not being owner-occupied. But it is possible to achieve on a rental home but it is quite rare.

Does your aunt have enough income to pay both mortgages if the loan is modified? What type of loan and what interest rate does she currently have?