Marie, thank you for the additional information. It is important to remember that only the lender has the discretion to modify your loan. Any service out there can only assist in the loan modification process and can not guarantee that the lender will modify your loan. If you just submitted the application for the modification, the lender needs a chance to review it and determine what your debt to income ration is. The reason they look at this, is because they want to make sure that after all your basic expenses are paid, that your income would still allow you to make the modified monthly payment each month. When the lender modifies your loan, they take all the past due premiums, along with any other fees, interest and costs and roll that into the balance owed. They then typically extend the life of the loan and provide you with a fixed interest rate. When doing so, they want to see if the number is XXXXX then the current payment or that your income will allow you to make the payment each month. The goal of a loan modification is home retention. However, homeowners
still are sometimes not able to make the payment. Your credit is certainly a factor for the lender to consider, since it is a reflection on your ability to repay. The lender should have provided you a reason for the modification being denied and in doing so, you would know what needs to change. You can always reapply for the modification, since your income and situation is constantly changing. If you are both back at work, you may want to resubmit the application when you can show verified income ( i.e pay stubs) to show the ability to pay, which could offset their concern with your credit.
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