Homeowners facing foreclosure are often advised to apply for mortgage loan modifications as a way to lower their monthly payments. Like any application process, however, the potential for denial of assistance exists. When lenders deny mortgage loan modifications they leave borrowers feeling abandoned, helpless, and desperate. Borrowers who have been denied loan modification assistance from their lenders need not give up all hope. Alternatives to mortgage loan modifications exist that can benefit the borrower in the absence of assistance from the lender.
A person who has been denied a loan modification should contact a local attorney to review the facts and circumstances of a mortgage and modification request. An attorney may be able to change the mind of a lender by applying legal tactics and strategies that general homeowners are unaware of. Should a lender continue to deny a request, the attorney can guide their client through alternative options, like litigation or bankruptcy. Litigation involves taking the lender to court and bankruptcy is a federal program that allows individuals to discharge or reorganize certain debts, including mortgage debts.
Every alternative to mortgage loan modifications carries its own set of consequences and risks that must be weighed and considered. For example, mortgage litigation can be more expensive than other options, but bankruptcy can impact a person’s credit score for many years.
A short sale is another option that homeowners who have been denied for modification can consider, but this option requires the homeowner to abandon their home and pay the costs associated with moving.
Depending on the financial needs and personal desires of the homeowner, one option will be more attractive than others, and some options will bear more acceptable consequences than others. It is difficult to say which option is best, because every person’s individual situation will be different, and the best option for one person may be the worst option for another.
The amount of money left on a mortgage and the amount of money in default will also affect a person’s decision. An attorney can review a person’s financial history and debts and advise them on the best course of action to take after a loan modification request has been denied.
If a homeowner is considering a loan modification, it is recommended that they save themselves sometime in the future and secure the services of an attorney before a request is denied. Presenting a loan modification request through an attorney before a lender is able to deny the request can save a client unnecessary anxiety and stress in the future.