My mortgage assistance application was denied

This notice

The letter says the company has completed its review of your request for mortgage assistance. It may deny a loan modification. It may offer a trial plan, a repayment plan, a forbearance, a short sale, or another option instead.

That paper is a loss-mitigation determination notice. Regulation X at § 1024.41 requires a written decision after a complete application. The notice must say which options, if any, the servicer will offer. If it denies a trial or permanent loan modification, it must give a specific reason for each denied option. It must also tell you about any appeal right and how long you have to use it.

The CFPB letter-terms page explains the words on that paper. Loss mitigation means the steps a servicer takes to avoid foreclosure. A trial modification is a short test period. If you make those trial payments as agreed, the servicer should finish the lasting change.

This is not a Notice of Servicing Transfer. That other paper says a new company will collect your payments.

It is also not a force-placed insurance letter. That other paper is about hazard coverage on the house.

Recent CFPB complaints describe this determination letter at Rocket Mortgage, LoanCare, Select Portfolio Servicing, and Planet Home Lending. Some people got a letter that the package was complete, then a denial a few days later. Some people got a trial plan in writing, then a later denial notice. Some people say the denial listed only one modification program.

Official path

1. Save the determination letter, the envelope, and any earlier “application complete” notice. Write the letter date on one sheet. Add the date 14 days later. Keep copies of the application you sent.

2. Read the CFPB page Can I appeal a denied loan modification?. You can ask for a review if two things are true. You sent a complete application at least 90 days before a foreclosure sale. The servicer denied any trial or permanent loan modification it offers. The appeal is due within 14 days after that denial. A short-sale decision is not in this appeal path.

3. Compare the reasons on the letter with the CFPB page What happens after I complete an application to avoid foreclosure?. After a complete application more than 37 days before a sale, the servicer should answer in writing within 30 days. A modification denial must say exactly why you were denied. The § 1024.41 rule says the notice must name the owner or investor when an investor rule caused the denial. If a net present value test caused the denial, ask in writing for the inputs used in that math.

4. Send a written appeal to the address on the letter before day 14. Do this if a loan modification was denied and the 90-day rule applies. Ask for a reviewer who did not make the first decision. The CFPB appeal page says the servicer must answer that appeal in writing within 30 days. If the appeal produces an offer, you generally have 14 days to accept or reject it. Use certified mail or another method that proves delivery. Keep a copy.

5. Call a HUD-approved housing counselor through Find a housing counselor or Mortgage help. The CFPB how to avoid foreclosure page says this help is free. You can also call (800) 569-4287. Do not pay a company that promises to stop the foreclosure.

6. Write a notice of error if the letter skipped reasons or skipped an option you applied for. Also write if a “complete” notice was followed by no decision. Use the CFPB error page and the sample notice-of-error letter. Mail it to the error-notice address on your statement or the servicer’s site. The error page says the servicer must confirm receipt within five business days and generally answer within 30 days. Keep making any payment that is due.

7. Submit a complaint at Submit a complaint if the company starts foreclosure during a complete review. Also file if you never get a written decision. Attach the determination letter, the complete-application notice, and your appeal. Most companies respond within 15 days.

People in CFPB narratives often wait for a phone agent to “reopen” the file. The official pages win that conflict. Send the written appeal within 14 days, then keep the proof.

What people reported

Often helps

• Filing the written appeal before day 14 and keeping the delivery receipt, instead of only calling the loss-mitigation line.
• Asking a HUD counselor to check whether the denial listed every modification program the investor actually offers.
• Sending a notice of error after a “complete application” letter, then silence, or a denial that named only one option.

Often fails

• Waiting on hold for a verbal reversal. Recent complaints describe trial plans ended on a phone call with no written termination.
• Paying a foreclosure-rescue company that asks for money up front or for the deed.
• Skipping a trial payment while the appeal is pending. A missed trial payment can end the plan on its own.

Template

[YOUR FULL NAME]
[YOUR ADDRESS]
[CITY, STATE ZIP]
[DATE]

[SERVICER LOSS MITIGATION DEPARTMENT]
[ADDRESS ON THE DETERMINATION LETTER]

Re: Appeal of loan-modification denial, loan number [LOAN NUMBER]
Property: [PROPERTY ADDRESS]
Letter dated: [LETTER DATE]

To whom it may concern:

I am appealing the loan-modification denial in your letter dated [LETTER DATE]. I submitted a complete loss-mitigation application on [APPLICATION DATE]. Please assign this appeal to a reviewer who was not responsible for the first decision.

The letter states I was denied because [REASON QUOTED FROM THE LETTER]. I dispute that reason. Please evaluate me for every trial or permanent loan modification available from the owner or investor of this loan, not only the program named in the letter. If a net present value test was used, please send the inputs in writing.

Please send your written appeal decision to the address above. I am keeping a copy of this letter and proof of delivery. This letter is also a notice of error if the first decision skipped a required reason or a required option.

Sincerely,
[YOUR FULL NAME]
[PHONE]
[EMAIL]

Stop here if…

• The paper says the servicing of your mortgage loan is being transferred; use the servicing-transfer guide.
• The paper is about hazard insurance that is expiring, expired, or insufficient, or about force-placed coverage; use the force-placed insurance guide.
• You were served a foreclosure lawsuit, or a sale date is already on the court calendar; respond through the court by its deadline and get legal help.

FAQ

Is this the same as a Notice of Servicing Transfer?

No. A determination letter is about whether the company will offer mortgage help. A Notice of Servicing Transfer says a new company will collect payments. Different paper, different clocks.

The letter offers a trial plan. Is that a denial?

Not always. The CFPB letter-terms page says a trial modification is often the first step toward a lasting change. Make every trial payment on time. If a later letter denies a modification, the 14-day appeal may then apply.

Do I still pay while I appeal?

Yes, if a payment is due. The CFPB error page says to keep making payments while you wait for a written answer. A missed trial payment can end the plan even if you also appealed.

They denied only one program. Can I still appeal?

The CFPB appeal page covers a denial of any trial or permanent loan modification the servicer offers. The letter should give a specific reason for each denied modification. A short-sale decision is not in that appeal path.

I never received a written denial. What now?

The CFPB complete-application page says you should hear back in writing within 30 days after a complete application that arrives more than 37 days before a sale. Send a written notice of error and ask for the determination in writing.