If your loan modification has been denied, don’t give up. You are entitled to appeal your lender decision and as long as you are able to submit updated, revised budget information they are required to review you again. While it can be disappointing and frustrating, the fact is that the majority of applications are turned down-simply because homeowners do not understand just what it takes to qualify for a loan mod. Here are some steps to follow if this is an issue for you:
- First, find out WHY you were denied-the banks are required to provide you a written explanation about the reason for the denial. Once you know what the problem is, you can go about fixing it before you re-apply.
- Often, simply verifying the financial information that the bank has in their system can be a solution. It is very common for your income, expenses and assets to be input by the bank incorrectly-and this can cause denial. Call them and ask them to read back to you all of your financial information on file.
- If the reason for denial is NPV failure, this is usually due to 2 reasons: first, the current market value of your home used by your lender may be inaccurate. For purposes of the loan mod approval, the LOWER the current market value the better. Second most common reason is not enough monthly gross income reported on your financial worksheet. This will cause a denial due to failing the Waterfall modification terms.
- Dispute the value of the your home with your lender within 30 days of receiving the notification-you can provide them with a Market Analysis or BPO provided by a local real estate agent, or in extreme cases you may need to pay for an actual appraisal. The bank is obligated to review this information that you provide to them, re evaluate their decision and let you know within 30 days.
- Gross monthly household income is critical-make sure before you re-apply that you know exactly how much you should be reporting to pass the NPV and Waterfall. Use the Loan Mod Calculator program to automatically compute
and display your own specific income requirement. This program will also show you the Waterfall results, debt ratio, cash flow and other critical areas for your budget revisions.
- Once you have fine tuned your new application using the Loan Mod Calculator, re-submit it to your lender with the required documentation for final review. Follow up 10 days later and every 10 days thereafter until you get the approval you deserve!
Get more free tips and information, visit MyLoanModificationCenter.com and read BLOGS.