Once a trial payment plan is completed, most borrowers are likely to receive a permanent modification of a home loan. However, some borrowers are denied a loan modification, even after making all the payments in a trial. Why? A trial payment plan is typically just a temporary arrangement where a borrower agrees to make reduced payments for a specified period as a way to demonstrate their ability to meet the terms of a modified loan agreement. However, the decision to ultimately grant a permanent loan modification depends on more factors. During the trial period, the lender typically processes information and documentation provided by the borrower to determine if it can offer a permanent loan modification.

Why do lenders sometimes deny loan modifications?

Lenders will sometimes deny loan modifications because of a number of factors, including the borrower's financial situation, the lender's policies, and the specific terms of the loan modification program. Even if a borrower successfully completes a trial payment plan, the lender may still deny a permanent modification if they determine that the borrower does not meet their eligibility criteria or if there are other issues with the application. For example, some lenders may deny the loan modification if the borrower:

·      Doesn't make trial modification payments on time

·      Fails to send in the required documents

·      Has unresolved liens on the property

·      Didn't sign and send in the final agreement on time

It's important for borrowers to carefully review the terms of any trial payment plan and to communicate regularly with their lender throughout the process. If a loan modification is denied, borrowers may have options to appeal the decision or explore other alternatives to address their situation.

Are trial payments plans always 3 months long?

Most trial payment plans are 3 months long, but sometimes a borrower will make 3 payments on time and the lender still won't have an answer for them on a permanent loan. The lender may seek more financial documents or need more time. If that's the case, the lender will ask the borrower to continue making trial payments until a final decision is made. It's not uncommon for 3 months to turn into 8 months of trial payments with no final decision. Regardless of the precise timeline, borrowers need to maintain open communication with the lender and continue making paymetns until a permanent decision is made.

Homeowners facing a loan modification denial should not wait to find guidance and assistance. At The Law Center, we are a team of specialists that are passionate and up to date about the foreclosure process from start to finish and helping homeowners at the highest level. Our staff and attorneys approach each client and each property as a new challenge, one that requires thorough analysis, zealous representation, and thoughtful strategy. It’s your home, let The Law Center help you defend it.

Call us now and speak with a foreclosure expert on how you can make the foreclosure process work for you -- not against you. (312) 600-8815

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