Did your bank turn down your loan modification application? This is really discouraging news for a homeowner and many times they will just give up after hearing this. However, there is a way that you can turn that denial into an approval - you just need to know a few key bits of information in order to have a good chance at success. If this has happened to you, here are some important things know.
First of all, if you have a lot of loan modification questions then before you contact your lender to re-apply you need to take the time to get a little bit of education. The fact is that most borrowers are denied a loan workout simply because they did not know or understand how to complete the application paperwork correctly. Unfortunately the banks are not much help when it comes to this, and so homeowners are left trying to figure it out themselves - often with a loan mod denial being the result. Follow these steps to help you apply for a loan modification correctly:
Never disclose your financial information - monthly income, monthly expenses and bank balances to your lender until you have had the chance to fine tune your figures. You need to make certain that the information you are providing will prove that you fit into the standard loan modification approval formula.
You are allowed to re-apply if you have been turned down for a loan mod, but only if you are able to submit new, updated financial information. You cannot just keep submitting the same information that resulted in a denial the first time.
Learn how to use the standard loan modification approval formula to help you prepare your financial statement correctly. This is a mathematical equation used by over 90% of lenders and includes your monthly income, expenses and bank balances. You can actually use a loan modification software program that mimics this same formula and find out just where you may need to adjust your own budget to fit into the program guidelines. It is critical to do this ahead of time so that you are confident your final paperwork is accurate and acceptable.
Be sure to verify that the bank has input your financial information correctly into their system - very often the income or other key elements are input incorrectly on the bank's side, and this can result in a loan modification denial when in fact the homeowner really does qualify. Ask your bank to repeat to you exactly what they have in their system for you income, expenses, bank balances, etc.
Homeowners have so many loan modification questions that they have a hard time understanding how the process works. However, you don't have to try to figure this out all by yourself. You can use excellent resource materials and tools designed specifically to help you apply correctly. Don't count on your lender to give you this inside information - it is up to you to be prepared if you hope to turn that loan mod denial into an approval.