When a person encounters financial hardships such as a layoff or high medical bills, they may be able to get some relief by asking for a loan modification from their mortgage lender. However, many clients aren’t approved the first time they ask, and it may be beneficial to hire a Rockville loan modification law firm. Below are some of the most common reasons for loan modification denial.
The Lender Believes the Client Can Afford the Current Terms
Many modifications are denied because clients didn’t show the lender a good reason for the default. Financial hardships must be proven, and if they’re not, the lender may think that the client just doesn’t want to repay the loan. If someone loses their job and doesn’t fully explain the lost income, the modification will be denied.
The Client Cannot Afford Even a Modified Mortgage
If a person has proven financial hardship to the extent where a lender does not believe they can make any payments, the modification won’t be approved. However, if the client has other, undisclosed income or if the lender incorrectly calculated the amount owed, it may be possible to file an appeal.
A Previously Approved Loan Modification
If a borrower has had a loan modification within the past year, they cannot get another one even if they’ve gone through a marked change in circumstances. As far as the mortgage lender sees it, the client has already gotten a reprieve, and they’re not getting another. Depending on the foreclosure schedule, a client may be able to try again after one year has passed.
The Documents Aren’t Finished
This is one of the most common reasons for mortgage modification denial, and it’s also one of the most preventable. A Rockville loan modification law firm can help clients properly fill and submit the necessary paperwork.
The Hardship Is Not Legitimate
Similar to the first reason on this list, a client can get a denial because they have not fully documented their financial difficulties. For success, one must come up with enough proof that they’ve gone through a hardship. It may be necessary to include additional information such as medical bills and other sudden expenses that have prevented the client from making timely mortgage payments.
