You do not necessarily want to give up all hope if your loan modification request gets denied by your lender. But, you can certainly avoid the risk of losing your home by taking other necessary steps. Perhaps, you can overcome the situation just by correcting information provided to the lender. Either way, you are in a position to avoid facing a foreclosure if you are ready to take the necessary measures.
Reasons for denial
Usually, you will get a letter from your lender upon a loan modification denial, stating the reasons for denial. Here are some of the common reasons
- Delinquent credit
- Insufficient income
- Loan-to-value ratio
- Inadequate information
Once you are clear with the reasons for your loan modification request being turned down, you should start to fix the problems and see if you can get the approval back.
Hot to get the things fixed
In some cases your actions could determine whether or not you are approved for a loan modification. Any payment towards your debt will be a signal of good faith to your lender. In fact, when you start to fix the problems in line with the lenders eligibility criteria, they start to realize that you have a serious need of this help and you are ready to do whatever it takes to get the loan modification approved. The following suggestions might be the one thing needed to have your decision overturned:
- Make arrangements to repay any existing late credits. It doesn’t matter if the amount you pay is less than the original installment
- Start reducing your expenses. Make some sacrifices like downgrading to a cheaper car. On the other hand, find ways to increase your income like getting a part-time job
- Try to reduce your loan-to-value ratio by borrowing from family members
- Revise the application form, gather the missing data and carefully fill the application and re-apply for a loan modification with no errors.
You surely will need to do some changes to your lifestyle in order to save your house. Without some sacrifices you will find it impossible to overcome the situation.
Re-Apply for the loan modification
When you are done with correcting all the errors to match the criteria, before you reapply, call your lender and get an appointment to meet them. Once you talk face to face with the lender, you can clearly explain the steps you took to fix the problems to be on par with their criteria. You should be specific with the details you provide and let them know your sacrifices in order to save your home. You can even call a FAIR Counselor to help resubmit your application. FAIR Counselor’s have successfully gotten approved loan modifications for homeowners even after several denials.
List Your Home For Sale and Move Into a Rental Property
In some cases, there is no real hope in getting a loan modification and the time taken to reapply is not in the best interest of the homeowner. In such cases, it is best to list your home for sale to avoid foreclosure. After the sale of your home you can at least begin fresh without further damaging your credit worthiness and walking away stress free and without debt. FAIR offers sellers’ relocation services to place homeowners and their families in comparable homes fast even when most rental properties would not accept someone under such poor financial constraints.
Would you like to learn more about how FAIR can help you? Contact us today at: (310) 321-1234.