Mortgage Modification Rejections Are Good, Hope For A Mortgage Modification Rejection, Please Reject My Mortgage Modification Application!

Rejection has become a way of life to applicants for mortgage modifications. The lenders have made very little progress in improving process performance in spite of over 18 months of financial incentives from the Obama Adminitration’s Making Homes Affordable Modification Program (HAMP). Applicants, even very well qualified ones, get rejected routinely.

These days, rejection of your mortgage modification is a very good sign! Of the modifications that we have successfully mnaged for clients in 2010, not one single application was granted without a prior rejection. You read that correctly – every one of the modifications I have completed for clients in 2010 has been rejected before being accepted. Even applications that initially were grantedTrial Modifications resulted in a rejection of the permanent mod before final acceptance. Some of them were rejected as many as three times before being granted! Wow!

The application process alone is daunting. Then, weeks of follow-up is required to keep the application on-track. Now, in addition, homeowners must also become expert at overcoming the rejection objections that lenders throw in their way. That means being able to tactifully escalate problems to supervisors, managers, directors, VPs, and CEOs. That means being able to mobilize local congresspeople, regulatory agencies and even the press! It’s a challenge!

But, stop whining. If that’s the way it is we just have to deal with it. The list of reasons for rejection include: “Your loan investor’s not participating in modification programs”, “You failed the NPV calculation”, “You make too much”, “Your income is too low”, “You have too many assets”, “Your 4506-T has expired”, “Your Ratios are wrong”, “You did not provide updated docs”, “We need a note from your mom (O.K., I made this one up!)”, ad infinitum.

Sure, all of these can be valid. But, often they are simply errors resulting from lender mismanagement of the application or are blatantly untrue statements that delay or stop the application process prematurely. If the borrower does not persevere it means the end of the application and a tragic conclusion to a family’s hope for assistance. So, when you get rejected do not give up. At least you’re not being ignored! Immediately get a precise explanation of why your application is being rejectd. Go through agents and escalate to a supervisor if you must to get a straight answer. Then, address the issue. Supply the missing doc or sign the updated form or correct the data entry error on your income (No, it’s not $85 per month. It’s $8500!) or do whatever it takes to get it back on track. Request reconsideration when you submit the information or correction to the agent. If you have submitted a good and accurate application upfront, you will eventually be granted mortgage modification.

Take heart. What is worse than rejection is the months of total disregard and that most of us get in the mortgage modification process. It’s not likely to change anytime soon. Mortgage modifications will continue to be a great way to throttle the foreclosure rate and they are a great way for homeowners to get some relief. It’s just taking a lot more perseverance and nerve than it should!

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