Top Five Craziest Reasons For Being Denied Loan Modifications

These are recent accounts from clients, homeowners, people I run into in my daily travels on why they didn’t get a loan modification. At our office, we are not a loan modification firm and even we hear some crazy almost unbelievable reasons why people couldn’t get a loan modification. Here are few examples of how people are denied loan modifications and how tough it can get:


5) Oil Prices – I chatted with a homeowner who was denied a loan modification. Reasons, the servicing company thought that a homeowner paying $400-600 per oil delivery was too high. Since the servicing company is located in a very warm part of the U.S. where oil is available, such an idea of a New York home needing oil deliveries during the Winter season seemed ridiculous.

4) Food Prices – Servicing company felt money spent by homeowner with a big family for food was too high. Sorry kids, looks like we are going to be eating gruel for a few months during our trial loan modification period.

3) Language Barrier – The servicing company’s loss mitigation company located in South East Asia didn’t understand the requests of the homeowner who actually did speak English.

2) Excessive Holiday Spending - Apparently spending way too much annually during the season of giving may lead you into a denial for a modification. For homeowners, give you coal and fruitcakes, you can at least burn them as a fuel source when you get cold (see reason number 5 above).

1) Dead Spouse: I’ve deal with two clients denied loan modifications after their spouses have unfortunately died. One servicing company didn’t view the death of a spouse as a substantial hardship. The other client who wrote a hardship that she “lost” her husband was misunderstood by the servicing company. They thought the client “physically lost” her husband, like a set of car-keys.


It used to be if you went into foreclosure, your options were either get a loan modification or short-sale your house. Now the loan modification option is now off the table. If facing foreclosure, the key is do something about it…and fast.

The following information is just opinion and for entertainment purposes and not to be intended as legal advice. Please seek a local attorney in your area for the best advice on how to protect your assets