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Turned down for loan modification

New York, NY |

I tried to modify my mortgage but was denied due to insufficient income. Obviously if I had enough money to pay my house-related expenses I wouldn't have applied for a modification. What is my next course of action? There is no other income, so I can't appeal that way, is there any other route?

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Filed under: Debt Appeals
Attorney answers 2


Although each lender is different, most of the major banks cooperate to some degree with the current administration's Making Homes Affordable program. If your income was not sufficient to meet those MHA guidlines, that may be the reason for the denial.

However, the modification programs at each lender are frequently conducted by poorly-trained and/or inexperienced personnel. Some of my clients have had success simply by re-applying over and over--eventually they found someone who would actually take a look at their situation on its true merits--and they received a modification. Also, the MHA guidelines are constantly changing, so you might qualify the next time around even though you've been turned down this time. Don't give up.

The above response is not legal advice and no attorney-client relationship is created hereby. The response is a general statement of certain broad legal principles that may apply to the question(s) raised, but no legal advice can be rendered without a full disclosure of all pertinent facts. Accordingly, no one should rely on the above response, but should seek the advice of a qualified attorney.


A loan modification is based on your income and how much other debt you have. Either you fit into the guidelines or you don't. However, if your income charges or the amount of debt you have is reduced, your ability to meet the guidelines could also change.

I have a 4 part video explaining how loan modification works. If you are interested, you can watch it by going to my legal guides. I have posted the link to part 1 below.

Hope this perspective helps!