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Why Would My Loan Modification Request Be Denied?

 Posted on May 15, 2020 in Loan Modification

Lake County loan modification lawyerWhen you are facing financial distress, you might explore options like modifying your mortgage loan terms or negotiating with your lender to avoid foreclosure. Foreclosure can have a substantial impact on your current and future credit, not to mention the loss of your home. If you are struggling to make your mortgage payments, a loan modification request might be the best way for you to get your debt under control.

Requesting a loan modification does not always result in an approval. Your request can be denied for a variety of reasons. In many of these cases, it is possible to resubmit the request and potentially have it approved with additional information provided. If you are facing this situation, speak with an experienced attorney about your options.

You Have Insufficient Credit or Income

If you are denied due to having credit issues or not enough money to afford the modified loan terms, you will have to make changes in your daily lifestyle and expenditures. For example, if you have outstanding debt, pay at least some of it. If you cannot afford to pay your entire credit card balance, even paying a portion of it can help you. Similarly, if you cannot show that you have a certain amount of available cash, make changes like selling a vehicle or cutting unnecessary expenses like cable or dining out to save money.

Your Application was Missing Information

An application for a loan modification requires you to provide a substantial amount of information, such as signatures, income verification, and other documentation. If your application was missing anything, this could be why it was denied. Your attorney can comb through your application to determine which pieces of information you need and help you obtain them.

You were Ineligible for a Modification

Your application could have been denied because you were ineligible for a modification under the terms or the program you sought. Many lenders have a variety of options for loan modifications, each one designed to address certain types of situations. If you were not eligible for one program, you might have the option of applying for a different one. Your lender will be able to provide a list of all of the relief programs they offer.

Work with a Libertyville Foreclosure Prevention Attorney

Having a loan modification request denied can be extremely stressful, buy you should not assume that you are out of options. Contact an experienced Lake County mortgage loan modification lawyer to discuss your situation and to determine the course of action for your case. Call 847-549-0000 to schedule a free consultation at Newland & Newland, L.L.P. today.   




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