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# HowTo Package Your Loan Mod Application Kit
# HowTo Phone Negotiation Tips
# HowTo Complain & Motivate To Get Action
# HowTo Follow Up by Phone, Fax, Mail
# HowTo Use a Qualified Written Request
# HowTo Use a Mortgage Audit As Your Ultimate Weapon
# HowTo Fight Rejection Tactics
# HowTo Stop a Foreclosure Sale In 1-Day
# HowTo Remove Bad Credit & Raise Your FICO Score
# HowTo Eliminate All Your Debt

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Q: How can I find out why Bank of America rejected my loan modification application

Answer: Not only Bank of America, but nearly all banks are repeatedly turning down good loan modification packages for a few common reasons including:

1. Borrowers are not showing positive cash flow on their budget
You can no longer have negative cash flow on your budget.

2. Borrowers are not providing any upfront money
Banks want to see some cash and they are looking for some upfront payments.

3. The bank has made a mistake in qualifying you for the loan modification.

4. You are too early in the foreclosure process. Banks have statistical data that places a borrower in a group that is more likely to cure the loan without them giving you any concessions.

5. The loan servicers are so overwhelmed with files, they are rejecting applications for frivolous reasons to get the files off their desk because the employees have a quota to maintain.

Has your loan modification request been in limbo, denied or cancelled? Watch this video

Loan modification expert, Mike Rockwood, and author of the loan modification workbook I recommend, discusses the reasons why borrowers are getting rejected and what steps to take next to challenge the rejection.

If rejected, one of the most important tips Mike gives is to NOT START OVER. The last thing you want to do is to get in the back of the line of thousands of applications. Instead, you need to request a review of your file and reinstatement.

Watch the video coaching segment conducted by Mike and his son and business partner for lots of good information on overcoming being denied for your loan modification.


Here’s a couple of other strategies to use:

Strategy #1: Mike Rockwood, suggests this phone call strategy to get the bank to tell you why your package has been denied.

How you can force your loan servicer to get off the dime and approve your loan modification - especially if they have been jerking you around

  • In your loan modification application, include a Qualified Written Request that requests a copy of the note. This is the note that is referred to in the video segment. If they cannot produce it, which is highly likely, you've got leverage against them to negotiate aggressively, ie, get a principal reduction along with better interest rate terms. This will likely an in-house modification deal, not a HAMP deal.
  • NEW: Robo-signing scandal may give legal leverage for approval Read More Here
  • Watch the Q&A Coaching Videos for more help:
# HowTo Package Your Loan Mod Application Kit
# HowTo Phone Negotiation Tips
# HowTo Complain & Motivate When Getting the Run Around
# HowTo Follow Up by Phone, Fax, Mail
# HowTo Use a Qualified Written Request
# HowTo Fight Rejection Tactics
# HowTo Stop a Foreclosure Sale In 1-Day

Call the bank back at least five times to ask why your package was denied. When you do call back each time, make slight changes each time regarding what you are able to do such as increase the amount available for a repayment plan by $500, for example, or increase the household income. This strategy gives the rep a reason to go into your file.

Strategy #2: If you don’t have cash saved to make some upfront payments and you have a fanniemae , freddiemac or FHA loan, there are there are two programs available to get some cash.

1. HAS Program for fanniemae insured loans

HomeSaver Advanceā„¢ (HSA) is an unsecured personal loan, up to the lesser of $15,000 or 15% of the original UPB, designed to help eligible borrowers cure their first lien mortgage loan delinquencies. It provides funds to cure arrearages of principal, interest, taxes, and insurance (PITI), as well as other advances and fees. HomeSaver Advance is documented by a borrower-signed promissory note, payable over 15 years at a fixed rate of 5% with no payments or interest accrual for the first six months.

Click here for more details on fanniemae’s website

2. Partial Claim Program

You may be able to obtain an interest-free loan from the U.S. Department of Housing and Urban Development (HUD) to bring your mortgage current. You may qualify if your loan is at least four months delinquent, but no more than 12 months delinquent, and you are able to begin making full mortgage payments. If your loan is in foreclosure, the servicer could take it out of foreclosure to do a partial claim.

When you lender files a partial claim, HUD will pay your servicer the amount necessary to bring your mortgage current. You must execute a promissory note, placing a lien on your property until the note is paid in full. The note is interest-free and is due if you sell or leave your property or when your mortgage matures.

Click here for more details on getting a partial claim

Partial claim option pdf

Before completing and sending in a loan modification package, you may want to obtain some coaching to combat the stall tactics banks/servicers are using to cut to the front of the line of other applications and get approved faster

Click here to get proven help with your home loan modification

Homeowners – Need Some Sound Advice?

Get Out of Debt Workbook
Seasoned debt expert shares several little known but highly effective techniques guaranteed to get you out of debt fast – no matter how much you currently owe.
Stop Foreclosure
Get more help on fighting to stop a foreclosure with one of 7 options. For example, if a loan modification is not an option learn about a little-known government program that will stop a foreclosure in less than a day without an expensive attorney.

Also get the latest foreclosure news around the country, read Q&As and other resources.

Legally Restore Your Credit
If you are visiting this blog, you likely have mortgage lates, which are a big blemish on your credit report. Once you resolve your mortgage situation, you can legally remove those mortgage lates and all derogatory credit from your report without having to hire an expensive attorney or credit repair service.

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Technorati Tags: home loan modification, loan modification, mortgage loan modification, loan modification program, hamp government program

Related posts:

  1. Bank of America rejected loan modification despite mediation help
  2. Q: How do I get Bank of America to do a home loan modification?
  3. What should I do after sending my loan modification application to the loan servicer?
  4. Q: Do home loan modifications get approved by Bank of America?
  5. Bank of America loan modifications has worst track record

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3 Responses to Q: How can I find out why Bank of America rejected my loan modification application

  1. Patricia DeVoe on 10/08/2010 at 11:02

    How can I find out if my bank participate with the Federal government loan modification programs? I have a HomeQ servicing company who is given me the run arounds. Does New York Mellon Bank participates?

    I do not want to lose my home and things do not look good. Please HELP.

  2. Gail Simmons on 11/08/2010 at 11:16

    Patricia, According to the list on my post, HomeEQ does participate in HAMP. I don’t have Mellon Bank on the list. Check the HOPENOW website. Review this post for links and contact info: /2009/11/21/list-of-lenders-or-loan-servicers-participating-in-government-hamp-loan-modifications/
    You may also consider the loan modification/stop foreclosure tools recommended on the site to help you keep your home and prevent getting the run around. Best wishes.

  3. Robert LaGrange on 30/10/2010 at 18:59

    My wife and I received our loan rejection notice from Bank of America today. The process started in early August we both signed lots of papers that you would normally sign at closing. In fact our representitive from the Bank of America Home Loans told us the closing would be sometime in November. We were never close to forclosure at any point with our loan with them.

    Here is the part that makes no sence to me. My wife and I have each worked at the same places of employment for over 35 years. We are current on all our bill payments includeing the mortgage payment to Bank of America. We only have one mortgage payment to Bank of America and have no other property. The thing I do not understand is that we were going to pay off one half of our current mortgage. We were still rejected for a loan. We had some of our securities sold to do this. Now we have lost interest money on the securities that were sold specifically for this purpose and still cannot get the loan.

    I have only one recourse is to take them to court and take legal action against them. The Bank of America should not be doing business in Indiana. What a scam they have going. If someone offers you half of what you owe them and they refuse to accept the money something is drasticly wrong with Bank of America.

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