Top 10 Bullsh*t Reasons Banks Give for NOT Approving Loan Modifications

If you’re one of the millions of people – and I do mean millions – who have applied for a loan modification and been turned down, you don’t need me to tell you how difficult it is. You may be thinking to yourself that it was something you did. But I’m here to tell you that if you went to your lender in good faith hoping to get a loan modification, you were in for an unfair fight.

I’ll give it to you straight, your lender does not want to give you a loan modification. Your lender can make more money by foreclosing on your home and selling it than they can by giving you a loan modification and they can get it sooner. They can’t actually tell you, “Sorry, we don’t want to give you a loan modification because we can make more money by kicking you out of your home, so we’re just going to make up a reason,” because that would be illegal, but believe me that’s what is happening.

To show you that you’re not alone, I’m going to tell you the top 10 bullsh*t reasons that lenders give for denying homeowners a loan modification and explain how bogus they are.

10. They claim they can’t help you through the Home Affordable Mortgage Program (HAMP) and deny you when you apply for a modification through them.

This is a lie. The HAMP program is backed by the government and the only reason a lender won’t help you through HAMP is because they don’t want the government to see what they’re doing. Then they tell you to apply for an in-house modification, which they deny you for and then claim that you were rejected multiple times and say that’s the reason you can’t reapply.

9. They make you fax forms over and over and claim they never received them.

I know so many homeowners who might as well have gone out and bought a fax machine and kept it by their bed (or did) because of how many times the bank told them they needed to fax paperwork. It’s all a trick. You’re faxing your forms to nowhere or the bank is shredding your forms and claiming to never have seen them. Then they’ll deny you for not sending things in. They also say you can't just bring the forms into the bank and give them to someone directly. How convenient.

8. They claim you didn’t send in things like HOA statements, tax bills, insurance certificates, etc.

Those forms are not necessary. If the bank wants those forms, they can easily obtain them. These have nothing to do with a loan modification.

7. They deny you for not making enough consecutive payments.

I know a woman who, in 2011, was denied for not making 12 consecutive payments in 2009. She went through process for an entire year, twice, and they denied her two years later for not making payments they knew about two years ago. Again, this is make believe.

6. They say your credit score is too low.

Loan modifications are not credit score based. I repeat: loan modifications are not credit score based. Even if your credit score is very low, you can still get a loan modification.

I will post reasons 5 – 1 later in the week. Stay tuned.