Why Is My Lender Denying My Loan Modification Request?
In short, your lender probably does not have the confidence that they will benefit from the transaction and/or they believe that you will be unable to reliably pay under the modified terms. When you formally request a loan modification, you will need to provide documentation demonstrating that you have experienced some form of hardship that prevented you from paying under the existing terms. This can include a temporary or permanent loss of income, a death in the family, a natural disaster, or an injury or illness.
You will also need to provide exhaustive financial documentation that demonstrates your future ability to pay should the terms of the loan be modified.
If you do not meet the eligibility requirements for a loan modification but do wish to keep your home, we can help you explore other relief alternatives, including:
- Curing Default and Reinstating. In the state of California, you have the legal right to cure your default and reinstate your existing mortgage agreement up until 5 business days prior to a foreclosure date.
- Refinancing. If you have considerable equity in your home, you may be able to secure a new loan with more attractive terms that can help you pay down your mortgage. Additionally, if you are at least 62 years old and have equity in your home, you may also qualify for a reverse mortgage.
- Negotiating a Repayment Plan. If you are currently in default but now have the financial resources to make payments, you may be able to convince your lender to allow you to pay augmented monthly installments to help you “catch up” on missed amounts.
- Obtaining a Loan Forbearance. If your current hardship is temporary in nature, your bank may be willing to pause or temporarily reduce payments.
- Filing for Chapter 13 Bankruptcy. As a last resort, filing for Chapter 13 bankruptcy will halt foreclosure proceeds for a period of 3 to 5 years. During this time, you will need to pay monthly installments that cover the entirety of your debts. While bankruptcy cannot discharge mortgage debt, it can eliminate credit card and medical debt, giving you time and flexibility to catch up on your loan.
No matter what challenges you face, our Irvine loan modification Attorney/Realtor at Lawyers Realty Group is committed to helping you keep your home. We can quickly assess whether your circumstances may lead to an effective loan modification and will always be straightforward with you when a modification request is not likely to succeed. Should a loan modification not be possible, our team will help you explore other foreclosure alternatives.