We get many calls from clients who believed they qualified for a loan modification and spent a great deal of time and effort to apply for a loan modification, only to find out that they never qualified for a modification, and no matter what they did, they would have been denied.
The loan modification application process takes time and requires submitting a lot of personal information. During this process, homeowners get further behind on payments, and once they are denied they may be left without options, and may be forced to file for bankruptcy. In many cases, the lender knows from the beginning that the homeowner does not qualify for a modification, and lets them submit anyway, wasting their time that can be better used looking for another solution.
At the law office of Ira J. Metrick, we can help you determine whether your lender improperly denied your modification, whether you qualify for a modification, and help you assess your options to prevent foreclosure and stay in your home.
Why Was I Denied for a Loan Modification?
There are many reasons a lender might deny an application for a loan modification or claim you don’t qualify for one, including but not limited to:
- An incomplete or untimely loan modification application
- Insufficient finances to afford a modified payment
- “Lack of hardship,” or ability to pay the current mortgage payments without issue
- You have already received the maximum number of loan modifications the lender allows
- You missed a trial loan modification payment
- You did not make 12 consecutive payments on the original loan or a loan modification
However, a common reason for a loan modification application to be denied is an error or violation on the part of the mortgage servicer.
Common Mortgage Servicer Loan Modification Violations
There are federal regulations in place requiring mortgage servicers to follow the correct process when a homeowner applies for a loan modification. These laws exist to protect borrowers from fraudulent activity on the part of the lender. Some of these violations include:
- Failing to provide loan information requested by the borrower within 30 business days
- Failing to advise the borrower within 5 business days of the receipt of the application if more information is needed
- Filing a Foreclosure Complaint, applying for a Final Judgment or scheduling a sheriff sale while the application is being reviewed (called dual tracking)
- Failing to issue a decision within 30 business days of receiving a complete loan modification application
- Informing the borrower that they must be in default in order to apply for a loan modification
If you have gone through the loan modification application process and your lender denies it saying that you never qualified, this could be a violation of federal law.
My Lender is Telling Me I Never Qualified for a Loan Modification. What Should I Do?
If you have been denied a loan modification and your lender claims you never qualified for one, contact Ira J. Metrick today. We can review your application to determine whether it was improperly reviewed or wrongfully denied, as well as any possible Fair Debt Collection Practices Act (FDCPA) or consumer fraud violations on the part of your mortgage servicer. Our office has filed and successfully settled many FDCPA complaints against lenders, servicers, and their attorneys.