Even if you’ve received a denied loan modification, the decision may not be final. In many cases, homeowners can submit a loan modification appeal to have their application reviewed and reconsidered for approval.
In this article, we’ll talk through what happens if your loan modification is denied, and how to appeal a loan modification denial so you can protect yourself and your home from foreclosure.
At Denbeaux Law, we help New Jersey homeowners navigate the loan modification appeal process to give them the best chance to save their homes. Contact Denbeaux Law today to schedule a free consultation with a loan modification attorney who can review your situation and advise you on what to do if your loan modification is denied.
Why Loan Modifications Get Denied
So, you’ve been denied a loan modification – now what? The good news is that not every loan modification application decision is final. Depending on the reason you were denied, you may be able to resubmit your application or appeal the decision. That said, what happens after your loan modification is denied will depend on why your application was rejected in the first place.
Your lender is legally required to send a written denial letter explaining the specific reason for their decision. Some common reasons why you would be denied a loan modification include:
- Incomplete or Insufficient Application (typically missing or outdated documents)
- Failed Trial Payment Period or Modification Default
- Reaching the maximum amount of loan modifications
- Not meeting program requirements, such as having low credit or an insufficient income
It’s important to understand that you can be denied a loan modification in error. For instance, your loan modification application could have been denied because of servicer errors, such as lost documents or miscalculations, or legal violations.
If the reason listed in your lender’s denial letter is vague, doesn’t make sense, or seems wrong, it may be a sign of a servicer error or legal violation. If this has happened to you, contact Denbeaux Law today to have an experienced loan modification attorney review your case and advise you on your rights.
The Loan Modification Appeals Process
If you believe your application was denied incorrectly or unfairly, you can appeal the loan modification denial. Your lender’s written denial letter should include information about how to file your appeal and the deadline for submission, which is typically 14 days from the decision notice.
To be eligible for an appeal, your initial application must have been complete, and you must submit your appeal within the deadline. While the appeal application is being reviewed, all foreclosure activity must stop. If your lender continues the foreclosure process during your appeal review, it is considered dual tracking, which is prohibited under RESPA.
After you’ve submitted your loan modification denial appeal letter, your lender has 30 days to provide a written response with the outcome of the appeal. If your appeal is accepted, your lender will send you a notice with the details of your new loan modification and likely start you on a trial payment plan. If your appeal is denied, your lender will send you a written notice explaining their decision, and the foreclosure process can legally resume.
Even if your appeal gets denied, you still have options to save your home. An attorney can review the appeal decision to see if any violations occurred that could be challenged in court or possibly help you resubmit a new application. If you received an appeal denial, reach out to an attorney today.
Contact a Loan Modification Attorney Today
The loan modification appeal process gives you the opportunity to correct any errors that may have led to the denial and requires the lender to review your case. Because appeal deadlines are strict and the process can be complex, working with an attorney who can help you write an appeal letter for your loan modification denial can help you get your appeal approved.
At Denbeaux Law, our team can review your denial letter, identify which issues are fixable, and help you build a strong defense strategy to protect your home. Contact us today to schedule a free consultation to learn how we may be able to help.
