Rejection has become a way of life to applicants for mortgage modifications. The lenders have made very little progress in improving process performance in spite of over 18 months of financial incentives from the Obama Administration’s Making Homes Affordable Modification Program (HAMP). Applicants, even very well qualified ones, get rejected routinely.

These days, rejection of your mortgage modification is a very good sign! Of the modifications that we have successfully managed for clients in 2010, not one single application was granted without a prior rejection. You read that correctly – every one of the modifications I have completed for clients in 2010 has been rejected before being accepted. Even applications that initially were granted Trial Modifications resulted in a rejection of the permanent mod before final acceptance. Some of them were rejected as many as three times before being granted! Wow!

It’s hard enough to meet the challenging application procedures and follow-up effectively to keep your application on-track. To have to also escalate your rejections to supervisors, managers, Directors , Vice Presidents and CEOs and to contact your local congressperson, the regulatory agencies, the trade associations and even the press in order to get it done? This is tough stuff!

But, that’s the deal so dealing with rejections is now part and parcel of the mortgage modification process. There really is no end to the number of reasons for rejection: Your lender does not participate in mod programs, Your application failed the NPV calculation, You make too much money, You make too little money, Your home is too valuable, Your 4506-T has expired, Your Ratios are not right, You failed to provide updated documents, We needed a letter from your renter saying that he pays rent (not just a copy of several of his checks along with a valid/current/signed lease), Your hardship does not qualify and etc. These are bad, but the worst one of all is when the agent can’t explain why you were rejected and claims that they do not have to provide a reason.

All of the reasons above can be valid. Sometimes they are. But, all too often, they are simply erroneous, and are the result of the lender having mismanaged the file or simply untrue statements that slow or end the application process if the borrower does not object. So, when you get rejected, press on. At least you’re not being ignored! Immediately demand (nicely!) an explanation of exactly why you were rejected. Go through several agents and escalate to a supervisor if you must to get the answer. Then, deal with it. Supply the missing document or sign the updated form or correct the data entry error on your income (No, it’s not $85,000 per month. It’s $850!) or do whatever it takes to get them back on track. You can request reconsideration when you submit the information or correction to the agent.If you have submitted a good and accurate application upfront, you will eventually be accepted and get the relief that the mortgage modification programs were intended to provide.

Be encouraged when you get rejected (sounds strange, eh?). It’s far worse to get ignored for another week and to remain in the seemingly endless loop of “active review”. The whole process is taxing not only our intelligence, our paperwork processing skills and our patience. These days it’s also taxing our perseverance and raw nerve. Still, still, still it’s a cheap and ralatively easy way to get some financial relief to help your family through this housing market meltdown.

Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification