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November 2011 Newsletter

What to do if your Loan Modification has been denied.

What can homeowners do after being denied a loan modification? Options to save your home from foreclosure after denied for a loan modification include:

  1. Filing for bankruptcy to stop foreclosure. Bankruptcy and foreclosure harm homeowner's credit scores and credit ratings.
  2. Homeowners denied a loan modification can file a complaint for being denied a loan modification.

A bankruptcy will stop a foreclosure and in the State of Indiana, it will stop the foreclosure and loss of your real estate up until the date of the sheriff sale. If you are facing a foreclosure or sheriff sale, you should consult immediately with our office immediately to assess your legal options and to figure out whether a bankruptcy is a viable option to you.

A Chapter 13 bankruptcy allows you to cure the arrears over a five year period but for your residence does not typically allow you to modify the interest rate or contract terms,  You are able to pursue a loan modification while in a Chapter 13 bankruptcy.

If you feel you were unfairly denied a modification, you can file a complaint with the regulatory agencies. If it's a nationally-chartered bank (such as Bank of America, Citibank, Wells Fargo, or Chase), go to www.helpwithmybank.gov, which is a website run by the Office of Comptroller of the Currency. However, you should know that most home borrowers have failed to get loan modifications the last several years. Some borrowers were lucky and received loan modifications, but most others that applied ended up worse off than they were when they started the process with the banks. It seems that people that came forward to apply for loan modifications found out that most banks gave them "trial" modifications, then many of those same banks proceeded to report those borrowers as delinquent or as having paid less than what they were supposed to on their loans. These borrowers’ credit scores and credit histories were damaged by their attempt to modify their loans.

Some borrowers found that they could only apply for a loan modification if they stopped paying their mortgages. Still others found out that they would not qualify for a permanent loan modification months and months after applying only to find out that their lender now wanted them to repay their loans in full or make up any reduction in their payments while they were in the trial period.

While you can complain about not getting a loan modification to the regulatory agency, you’ll need some reason why you feel that the bank was required to give you a loan modification and yet didn’t 

We are a debt relief agency. OUR DEBT RELIEF LAWYERS help people file for bankruptcy under the united States bankruptcy code. IF YOU NEED DEBT RELIEF, OUR LAWYERS ARE READY TO HELP.

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