What do I do if my loan modification is denied?

The main reason loan modifications are denied is because of a mistake. Most often it is a mistake on the mortgage servicers side because they are so inundated and their employees so overworked. Many are making  mistakes daily andmisplacing paperwork by the second. Sometimes the homeowner makes  a mistake in applying for their loan modification and usually it is on their income and expense sheet.

Your job is to find out where the mistake is!

Unfortunately when a  homeowner is denied, there is usually no reason given by the mortgage servicer. Leaving the homeowner in left field with unanswered questions and in complete fear of losing their home.

So what should you do if your loan modification is denied?

Breathe and say, "Moe says that there most likely is a mistake and I need to find out what the mistake is!"

If you are current on your mortgage, I can bet you a gazillion jujubees that is the reason why you did not get a loan modification. They will not tell you this, but my research has proven and the member here on the LoanSafe Forum will testify that if you aren't yet delinquent on your payments, then you most likely will not get help.

If you are late and really feel you deserve help and can pay your loan at a reduced rate, then keep fighting. If you aren't late, consider other alternatives.

Just because you were denied does not mean you can't reapply for a 2nd or 3rd time,. There is no law or lender policy that states this. So, get your paperwork together and analyze your whole situation to see what went wrong or where the mistake is.

If you did it alone the 1st time, then maybe the 2nd time you should get the help of a non-profit skilled in submitting loan modifications and dealing with mortgage servicers. If you went the non-protfit route, ask for your package from the non-profit or a copy and tell them you would like to make sure there are no mistakes and then you would like them to resubmit your loan modification.

You can also obtain the assistance of a law firm and I suggest you do. But make sure that they are skilled in loan modifications and bankruptcy's because you may need an attorney who can properly represent you in all your financial areas. My guess is that your mortgage isn't the only debt issues you have right now.  A lawyer that understands both mortgage law and bankruptcy law is lawyer that is a step ahead of the lenders.

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Moe Bedard
Founder at LoanSafe.org
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications. I currently live in Carlsbad, California with my beautiful wife and children.
  • Richard

    Moe, I am looking for a law firm that can help with a loan modification. The one i am looking at is Richard Garcia with C Anthony Rumore in Florida. Is this a well known firm?

  • Barbara

    I’ve been denied because of faulty info. I’ve been working with both my servicer and with NACA. Now my servicer won’t talk with me BECAUSE I am working with NACA. Naca doesn’t call me unless I call them, and getting ahold of them is a nightmare. I’m ready to drop NACA. I think I have to start all over again. Now, however, I’m in default, so maybe I’ll get more movement. I am going to refile for both mortgages with my servicer. At least I know all the info they will need! I’ll probably run up into the same faulty info again, but it may delay things awhile.

  • fbmlri

    i have been working with my loan modification since May 09 thru NACA. They submitted my documents June 16, 2009. I have been calling every week..Countrywide bought my loan to Ameriquest, and now Bank of America. I also made some follow up with BofA every time I make payments. Sept. 11, when i called my lender, i was told that we’ve been denied since Aug. 31st and NACA was notified. I havent heard from NACA about the bad news and when i called NACA after holding for half an hour, a rep told me that they have not heard from BofA yet and I still have to wait until I heard the results from them. But when? NACA dont know. I asked the BofA if I will get a letter saying I was declined and for what reasons, and they said I should have it in the mail. That was Aug.31, it is now Sept 14th, i have not received any. BofA said that the main reasons why I was declined was: my loan is OVER $729,750.00. Anyone in this blog who owe more than the amount and still got loan modified? Will a lawyer help?

  • Sally

    My loan mod was denied verbally because I have 48% equity. I lost my alimony income so my payment is more than my salary. I’ve been strung along by Chase for 7 months and this is the outcome. I told them why didn’t you tell me this in the beginning so I could have sold my house and saved 16,000 of payments. If I didn’t call in then I wouldn’t have known. They sent me a letter 2 months ago stating I was denied because of the equity and when I called them they said it was a mistake and that there was still activity on the account and it was in underwriting. I think its a ploy to continue to collect all of my savings.

  • Gary

    I have been strung along since September 2009. I called religiously every two weeks. I never received anything notices or comments//questions in writing. Never. I know this is a home program to help homeowners and I shouldn’t beat on Chase, but they received tons of money. They can at least take the time to print out a generated letter stating what the progress is!!!!!! They told me two weeks ago that I was rejected because I make too much. Is there anything else I can do. I am now current on home mortgage, but still late on HELOC. Not sure what else I can do.

  • Cesar A Garcia

    Citimortge denied my loan mod because I have my perants address as my mailing adress . They said that my home is rental property . I live in the house how can they say this ? What can I do ?

  • http://aol.com Antonio Rodriguez

    My loan modification was dragged out for about 7 months and I denied because I supposedly failed to send them all the documentation they required. I then spoke with them and they themselves told me that it was their mistake, they never asked for the documents i was supposedly missing. I then was given the option to appeal the decision and it was denied as well with no real answer. When I accepted this proposition from them i was not late on my payment but i was in need of help, now im 7 months behind because of their mistakes. What can i do, is there any attorneys i can contact?

  • dee

    wow! in reading all these comments it seems like all these banks are just scamming us and stringing us along. I was declined for loan modification from citi and was told because i hadn’t defaulted enough. i was late 2 payments. i told them fine i would just not pay a few more months. Is that what they preferred ???? It’s so stupid. Then after that reason, i got a letter telling me i was declined because i have sufficient income. Uh hello? If i had sufficient income and couldn’t pay the last 2 months, how can i have sufficient net income????? I work two jobs and I still can’t make ends meet. I’ve depleted my savings paying my mortgage.
    I completely agree that everyone gets the runaround and the underwriters are probably doing crappy work in looking over paperwork cause they are overworked and have stacks of cases to go through. My expenses are more than my income and it’s clear from my pay stubs and i have no other income coming in. I’m so frustrated. I tried everything and still nothing, but I will keep applying for modification until they get sick of me and i will probably end up having to get a lawyer. Where’s the help the President and the federal gov’t was supposed to help those citizens that NEED help???? That’s what I want to know. I don’t know any one person that has gotten help, do you?

  • http://www.loansafe.org Timothy N Tauvar

    My loan is with Chase Home Mortgage and I’ve been trying to get my loan modified for at least a year, 4 apps, each of which have been denied for failing to provide info they say was requested but not provided. The 4th and most recent application was denied saying we have not failed to make a payment. The reason for that is due to the present loan mod being 3 of 5 years required to benefit of $136,000.00 being waived if we are not late for 5 yrs from the start of the LnMod. We’ve told Chase that our daughter has been loaning us the money so that we have not as yet failed to make a payment on time. We don’t know how much longer our daughter will be able to help us. Chase, instead of helping, just continue denying thus trying to force us to lose that benefit of our most recent LnMod agreement of approximately 3 yrs ago. We fear we cannot last another 2 yrs just to secure that contractural guarantee. Help! Please!

  • cal tan

    Timothy N Tauvar,

    My loan is serviced by Chase too and they have been sitting on my loan mod application for two years now. Same documents are just being requested over and over again. I know exactly how you feel. Please reply back to me so we can share some knowledge on this and help each other.

  • http://www.loansafe.org Evan Bedard

    Hello Timothy,

    We have over 100,000 members here in our forum with countless homeowners like yourself pursing a loan modification from their servicer. Please join our FREE forum and you will find everything you need to know about the loan modification process!


  • http://google lisa

    Hello Evan,
    We are on our third Mod.The last one was approved & we were told to make our first payment on time so we sent it out & Wells Fargo our MC ending up taking $900 out of payment for supposely late fee’s & so forth….This set us back instantly because we now had to make another payment within a month!! Wells Fargo has totally taken advantage of us & we are now in forclosure:( This time we hired an Attorney with the money we would of used to pay our Mortgage. We just started & I’m hoping they can help us get Modified so we can save our home. I hope we took the right step??? Thank you for all your comments hopefully our story will help others like us.
    Evan Bedard: Hello Timothy,We have over 100,000 members here in our forum with countless homeowners like yourself pursing a loan modification from their servicer. Please join our FREE forum and you will find everything you need to know about the loan modification process! http://www.loansafe.org/forum/

  • http://www.loansafe.org Evan Bedard

    Hello Lisa,

    Thanks for your post and I strongly recommend you join our free forum here on LoanSafe to share your story. Hiring an attorney can be a wise move if you feel you’re getting nowhere on your won, but you just have to be careful as there are MANY loan modification/foreclosure prevention scammers. I’ve talked to countless homeowners like yourself who have spent $900-5,000 in upfront fees only to later find out they’ve given money to a scam artist. I’m not saying this is the case, just always make sure to do your research and read reviews from former clients. I would be more than happy to help guide you through the loan modification process. Feel free to contact me through the forums!

    Good luck!

  • Linda

    I’m currently waiting for a response from Caliber on my modification. My home is under about 25,000. I file for bankruptcy back in 2011 when it was under about 60,000+ and have still been in the home since. HSBC never foreclosed and now Caliber has the loan and wants to work with me to modify. I was unemployed in October 2013 but have now started a small business and also work a 1099 job since Jan 14. I submitted my pay stubs and the last 3 months of my profit/loss statements. I will have to reinstate the loan out of bankruptcy. Hoping for a modification so I can pay down the balance or get some help through Michigan Hardest Hit funds on the principle balance. What are the odds of them helping me? First time I tried I got turned down but I was on unemployment. Now it’s increased so I hope!

  • Ms Kogut

    I am with Wells Fargo and was denied a modification, can a attorney help me with redoing paper work again

  • Ms Kogut

    I just recently was denied for a modification, I want to see if I can get help with a applying again with a certified Lawyer, thanks kindely

  • Rebecca

    I was just denied on my loan mod. I want my house, why wont Nationstar work with me? They only offered that I pay $500 over my monthly payment for 6 months to catch up. If I could do that, I would not be 4 months behind.

  • t

    Chapter 13 if needed. If you receive a foreclosure date go to naca and get a lawyer to complete a chapter 13 to lower your monthly payments. This is my gift to you.

  • t

    Go to naca if you have a foreclosure date or need help with your modification. If all else fail file a chapter 13 to lower your payments and payoff any exisiting debt.


  • t

    Go to naca for assistance. If all else fail file a chapter 13 to lower your monthly payments. You can not miss any payments once it is approved.


    Chapter 13 if needed. If you receive a foreclosure date go to naca and get a lawyer to complete a chapter 13 to lower your monthly payments. This is my gift to you.