What Happens if a Loan Modification Was Denied?
When a loan modification is denied, the original terms of your mortgage remain in effect. This means you are still obligated to make payments according to the original loan agreement.
After the servicer receives and reviews a complete modification application, they must provide a clear and specific explanation for the denial, information on any right to appeal the decision, and, if applicable, a deadline for submitting additional documentation or information.
What to Do if a Loan Modification is Denied?
If your loan modification is denied, review the denial notice to understand the reasons for the denial. It is important to understand that an appeal is appropriate only if they made a mistake in reviewing the information you submitted. If you need to submit new or additional information, you must submit a whole new modification application. A mistake that many homeowners make is trying to add additional income or information to an application after it was reviewed and denied.
A denial issued because the application was incomplete is not a denial. IF THE APPLICATION WAS NOT COMPLETE, IT WAS NOT REVIEWED, AND YOU DID NOT LOSE ANY RIGHTS UNDER THE FEDERAL LAW. IN THOSE CASES, A NEW APPLICATION SHOULD BE SUBMITTED.
If the application is properly denied, time can be your friend. Loans are sold, and servicers change all the time. In those instances, you can submit a new modification application.
Should I Seek Legal Help?
Seeking legal advice can be beneficial, especially if you believe the denial was in error or if you’re facing foreclosure. Specifics can vary depending on individual circumstances and the policies of the lender, so it’s crucial to seek advice from an experienced attorney.
Contact a NJ Loan Modification Attorney Today
If your NJ loan modification was denied, contact us today. We offer aggressive representation to assist in the loan modification process and can make sure that the lender has followed all proper foreclosure procedures and has not violated your rights as a borrower. If you are facing foreclosure or need help with the NJ loan modification process, contact the law office of Ira J. Metrick today to discuss your options.