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.