What Can Be Done After I Have Been Denied a Loan Modification From Chase?
A financial setback has made it impossible for you to make your mortgage payments on time. Worried that you might lose your home to foreclosure, you called your mortgage lender, Chase, and asked for a mortgage modification. Unfortunately, your lender denied your request. Now you're left with no way to make your mortgage payments on time. Fortunately, you still have some options for either modifying your mortgage loan or selling your home quickly so that you can avoid the damage to your credit score that a foreclosure will cause.
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HAMP
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Most major mortgage lenders are participating in the government's Home Affordable Modification Program, otherwise known as HAMP. Under this program, the government provides financial bonuses every time a lender modifies the home loan of a struggling homeowner, leaving him with mortgage payments he can afford. Chase is one of the mortgage lenders participating in this program. If you requested a private modification through Chase and were denied, call the company again and ask for a modification through HAMP. The financial incentive might encourage Chase to take another look at your application. You will have to meet certain standards to qualify for such a modification: You'll need to have taken out your home loan on or before Jan. 1, 2009, and owe $729,750 or less on the loan. You must also have a monthly mortgage payment that is at least 31 percent of your gross monthly income.
Refinance
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If you can't get any modification from Chase, you might be able to refinance your home loan to one with a lower interest rate. This will leave you with a lower mortgage payment, perhaps one that you can afford even with your current financial setback. Call several lenders to ask for a refinance. You aren't limited to working with Chase. You can work with any lender licensed to do business in your state. If you don't have at least 10 percent equity in your home, though, you will struggle to qualify for a traditional refinance.
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HARP
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The government offers its own refinancing program, the Home Affordable Refinance Program, known as HARP, to give homeowners who don't have 10 percent equity the chance to refinance. Under this program, you can qualify for a refinance even if you owe up to 125 percent of your home's value on your mortgage loan. This means that if you own a house valued at $200,000, you can qualify for a HARP refinance even if you owe up to $250,000 on your mortgage. You'll have to meet certain government requirements, though; you'll need a home loan owned or guaranteed by either Fannie Mae or Freddie Mac, and you must be current on your mortgage payments. You must also work with your current mortgage-servicing company. In this case, that means that you'd have to pursue a HARP refinance with Chase.
Short Sale
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If you can't modify your mortgage loan payments through either a loan modification or a refinance, your last option might be to close a short sale. In a short sale, your lender agrees to let you sell your home for less than what you owe, taking a loss once the sale closes. This lets you price your house more aggressively, hopefully speeding up the sales process and letting you sell your house before you fall behind on your mortgage payments. You'll have to gain permission from Chase to complete a short sale, though. Chase will also have to approve any offer that you receive through a short sale. The bank can reject any offer it believes is too low.
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