What You Can Do if You've Been Denied for a Loan Modification

Getting a loan modification can be very beneficial when you are in a crunch with your mortgage. Many homeowners have found themselves in some pretty unenviable positions over the last few years. They are faced with foreclosure or taking some other form of drastic measures. One way to get out of the problem that you are in is to go through a loan modification. This is a negotiation with the lender that changes the terms of the existing loan. You could potentially lower the interest rate and the payment with these types of arrangements. However, sometimes the lender does not feel like negotiating with you and rejects the proposal. You are still in default and now it feels like your options are limited. If this has happened to you, here are a few things that you could try. 

Hire a Foreclosure Consultant

One career that many people do not know a lot about is that of a foreclosure consultant. Even though they are unknown, they could potentially help you in this situation. A foreclosure consultant will work on your behalf to help you resolve the matter when you face a foreclosure. They may even be able to talk to the lender for you and get them to reconsider the loan modification. These people are professional negotiators and they may be able to work their magic on your lender. If they can not get a loan modification for you, they can help you look at your options and decide exactly what is the best route for you. 

Short Sale

Another option that you have if a loan modification has been removed from the table is to go for a short sale. A short sale is when the bank allows you to try and sell your house for less than the loan amount. This is also going to require some negotiation with your lender and they may not want to do it either. However, it is at least worth a shot. In this scenario, you put the house on the market and try to find someone that wants to buy it. The potential buyer makes an offer and you accept it. You take the offer to the bank and they decide whether or not they want to accept it. They know that they are going to be writing off the other part of the mortgage, so they are in charge of whether or not the transaction goes through. This process can be very lengthy and you need to be patient throughout. However, if it works out, it could signal the end of your problem. 

Accept Foreclosure

If you are denied a loan modification, you could always just allow them to foreclose on your house. Sometimes, you have gotten yourself in much deeper than you would like to be. Although a foreclosure will affect your credit, it will allow you to start over and begin moving forward. Sometimes, it is the only option you have left and you should accept with grace and dignity.

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