Can a Mortgage Modification be Denied?

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Unfortunately, there are circumstances in which a mortgage company may deny a homeowner’s application for a mortgage modification. The modification process can be confusing and there are certain financial documents and other important information that must be provided by the homeowner, and within a limited time frame. If the appropriate documents are not provided, or the application is incomplete for any reason, the mortgage company will close their review and the request for a modification will be denied.

The mortgage company may also deny a mortgage modification for any of the following reasons:

  • The homeowner recently had a prior mortgage modification on the same loan. The time frame to reapply for a mortgage modification varies depending on the investor guidelines;
  • The mortgage company may have determined, after their review, that even with the mortgage modification, the homeowner will simply not be able to make the payments; and/or
  • The mortgage company may determine that the financial hardship that is described is invalid or insufficient.

If your application for a modification is denied, the mortgage company may suggest an alternative course of action such as a deed in lieu or a short sale.

The homeowner does have the right to appeal a denial if they believe the underwriter made a mistake in the calculations, or if there has been a change in financial circumstances. Neither of these reasons, though, is a guarantee that the mortgage company will change their determination.

The Mortgage Modification Center

If your mortgage modification was denied, or you have any questions about your eligibility, please contact the Mortgage Modification Center at (401) 467-7998 for your free initial consultation. We have successfully modified nearly 200 mortgages for homeowners and have the experience to assemble a modification package according to the lender’s specifications.