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LegalKnowledge, Attorney
Category: Legal
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Experience:  10+ years handling Legal, Real Estate, Criminal Law, Family Law, Traffic matters.
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Our bank Ive learned have decided to deny our application

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Our bank I've learned have decided to deny our application for loan re-modification. When I called to inquire about documents that might be needed I was told it was denied because we did not meet any of the three qualifying reasons. We have not received the official notice as yet, but I was told the case is due to be closed in the "work station" on May 13th. I want to know what other options I have as the bank options I was told are to pay off the default amount or foreclosure.

We were engaged with a law firm that claimed to be able to help out work through this process. At some point our emails were not being answered. When we next heard from them (not on letterhead) we were told they had gone out of business and suggested
we work with someone they will refer us to if we decided to continue with them. I did not call. We were then contacted by someone who identified himself as the one working on some of the firm's cases, and willing to continue working our case. I did not give an answer. Can you help?

LegalKnowledge :

Good morning. I am sorry to hear about the situation and certainly understand your concern. When an application for a loan modification is denied, it does not mean that all hope is lost. Since the bank told you what the three qualifications were to be approved, you would need to apply if and when, you would meet one of the necessary qualifying reasons. Your situation is constantly changing, so when it does, which would allow you to qualify, you would need to re-apply. I would be hesitant to start working with the person who called you, as they may not be able to help get your loan modified, since it is at the sole discretion of the lender. For all we know, they could have bought the cases and leads from the other firm and are just trying to get you to retain them. There is nothing wrong with speaking to them but ask them what they intend to do, based upon the information which you provided them, about what has happened so far. As them what they will do differently, when the lender told you that you do not qualify at this time. If the situation does get worse and you want to try and avoid foreclosure, you may want to speak with your lender about a short sale or deed in lieu of foreclosure, to prevent the foreclosure from appearing on your credit and staying there for roughly seven years. It may also allow for you to avoid any deficiency, which the lender may seek.


Can one retain an attorney to stop the foreclosure? Can one prove just cause for default? How about if the value of the property is much less than the amount owed? What is the possibility of bankruptcy, if one cannot meet the bank's criteria?

LegalKnowledge :

Yes, you can certainly retain legal counsel once the foreclosure action is filed. The attorney will represent you, file an answer to the complaint and raise any defenses which you may have. The burden would be on the lender to show you are in default, which is typically a condition precedent before they can file for foreclosure and they need to send you written notice, with a chance to cure.If the value of the property is less when what is owed, that is where my suggestion of a short sale would come in. A short sale is when the lender is willing to allow the home to be sold for less then it is worth and in some cases, waiving the deficiency. You also could file for BK, if it is in your best interest to do so. If you are considering that, you need to consult with a BK attorney who can look over your entire financial situation to determine if it is in your best interest.

LegalKnowledge :
I just wanted to follow up and see if you had any other questions or needed me to clarify something. I am here to help, so please let me know. Thanks!
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