If your loan modification has been denied, be assured: you're not the first person to experience denial, and you certainly won't be the last. Loan modifications may be one of the hardest things to get approved without an experienced attorney's assistance. After denial, your next step depends on the reason why you were denied and where your home is in the foreclosure process.
If you don't know the reason already, then call your lender and ask their representative to explain why you were denied. Most of the time, the lenders' notes are incomplete and don't give a concise explanation of the situation, and will require a higher-up to explain the situation better. Some denials are easier to remedy than others.
Re-submission may be your best option if your loan modification has been denied for one of the following reasons:
Insufficient or missing documentation
You fell behind on updating your paperwork with your lender every month
You didn't resubmit documents that were "lost" by your lender
Missing loan numbers
Incorrectly verified income
Incorrect NPV (net present value)
If you fall into one of these categories, then information will need to be gathered, updated, and prior to resubmitting for a loan modification.
Your Loan Mod Was Denied...Now What?Was Your Ratio Correct?
If you believe you were eligible for a HAMP loan modification, but didn't know your DTI (debt to income ratio) or NPVand the optimal way to structure these ratios for your lender, then you were setting yourself up for failure from the get-go. If you're unsure about how to structure these figures, then it's best for you to hand your loan modification over to an attorney who can handle the process for you. An experienced loan modification attorney can help you restructure the way your financial situation is presented to give you your best chance at a great loan modification.
Denied for HAMP? Go In-House
If you have been denied for a HAMP modification because you're simply ineligible, then it's time to apply for an in-house modification.Many major lenders offer in-house loan modification programs that allow borrowers to modify their loans. Every lender has their own guidelines for in-house modifications, and you will need to present a loan modification package that is structured toward these guidelines.
Also, if were denied for a HAMP loan modification before June 2012, you may be eligible for HAMP Tier 2. In June 2012, HAMP was expanded to include more homeowners, such as people who own rental properties and those who were denied a loan modification because they couldn't keep up with their trial loan modification payments.