MORTGAGE MODIFICATION, HOW TO ENFORCE YOUR RIGHT TO A LOWER MORTGAGE PAYMENT
Federal Law Gives You the Right to a Fair Process for Mortgage Modification
If you are having difficulty paying your mortgage, but want to keep your home, you do have rights. Even if your lender has turned down your application to modify your mortgage, you have to be sure it was turned down for a fair and reasonable reason. There is an actual law, that lays out like a menu, what a mortgage company can do and cannot do when it is processing your application. One of the big ones is if you submit a loan modification application 37 days or more before your foreclosure sale date, the lender must not foreclose but must review your application. Some other rules are that if you servicer changes while you are applying, it is up to the new servicer, not you, to get the paperwork from the old servicer, they can't require you to redo everything. All these rules are in the Code of Federal Regulations, ar 12 C.F.R. 1024.41, and servicers have to follow them, or else they can be sued.
What if you apply for a loan modification and you are denied? Ther same rules lay out that the servicer has to tell you why you were denied, and what information it relied on to deny you. You can appeal the denial, and the rules for appeal are also in 24 C.F.R. 1041. There is also an official commentary on the rule, that explains what the writers of the rules meant with each rule, and for an appeal, the writers thought it important that someone other than the person who made the denial decision handle the appeal. The rules actually say " An appeal shall be reviewed by different personnel than those responsible for evaluating the borrower's complete loss mitigation application. You can find the rules and the relevant official comments at https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1024/41/ .