Why Don't I Qualify For Loan Modification

by Laura
(Coral Springs, Florida)

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Why Don't I Qualify For Loan Modification

I sent in all the required documents for loan modification, they escrow-ed my mortgage, which increased my payments and then in turn said I did not qualify.

Bank of America Mortgage Loan Modification Answer:

by B of A Mortgage Loan Modification Expert - Dan North

Without knowing the specifics of your situation it is hard to say why you do not qualify for mortgage loan modification, but I can give you some of the common reasons that would disqualify you from modifying your mortgage.

• If you have no income, you can not make payments so would not qualify.


• If you do not have a financial hardship no lender will modify your mortgage payments


• If you lie on the phone or on your application or submit false documents you will not qualify (all your information is easy to verify and you will be caught)


• The investor that owns your mortgage may not be participating in HAMP or will not agree to any modification


• For HAMP modification:


• Your current payments must be higher than 31% of your gross monthly income


• You must meet the Dodd-Frank Wall Street Reform and Consumer Protection Act requirements:


• You must not have been convicted within the last 10 years of any one of the following in connection with a mortgage or real estate transaction:


• Felony larceny, theft, fraud, or forgery


• Money laundering or


• Tax evasion


• The home must be your primary residence


• The home must be between 1 and 4 units


• The amount you owe on your first mortgage is equal to or less than:


• $729,750 for 1 unit


• $934,200 for 2 units


• $1,129,250 for 3 units


• $1,403,400 for 4 units


• Your current mortgage was taken out before January 1, 2009


• Your modified mortgage may have failed the Net Present Value (NPV) Test. (Go ahead, download the test and run your numbers to see if you passed)

These are the most common reasons that you would not qualify for modifying your mortgage.

Ask Your Lender Why You Did Not Qualify

If your lender did not send you in writing the reason for denial ask them to send you the reason in writing. Under HAMP they are required to send you a written explanation for denial.

Once you know the reason why you do not qualify you may be able to do something about it if it is not any of the reason stated above.

Related BofA Modification Questions & Answers:

• Bank Of America Loan Modification Problems
• Can I Apply To B Of A For A HAMP Loan Modification A Second Time?
• Income Calculation For BOA In House Modification Vs MHA Modification
• Upsidedown Mortgage With Bank Of America - Please Help!
• BOA Bought My Mortgage But Is Not Honoring The Approved Modification

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