Loan Mod Denied? Appeal Within 30 Days (Here's How to Win)
A denial isn't the end. Under RESPA, you have at least 14 days to appeal with new information. Many denials are based on miscalculations or procedural errors you can challenge. Here's how to fight back.
14 days
Minimum Appeal Period
30 days
Some Programs
No sale
During Appeal
NPV errors
Common Grounds
Your Right to Appeal
Under RESPA (12 CFR 1024.41(h)) and HBOR (CC § 2923.6), if your modification is denied, you have the right to appeal. The servicer cannot proceed with foreclosure until your appeal period expires.
Appeal Deadlines
14 days minimum under RESPA from date of denial letter
30 days under some investor/servicer programs
Check your denial letter for the specific deadline
Don't Miss the Deadline
Mark your calendar the day you receive the denial. The clock typically starts from the date of the letter, not when you received it. Appeal immediately—don't wait.
Common Denial Reasons (And How to Challenge)
NPV Test Failed
The Net Present Value (NPV) test compares the expected value of modifying your loan vs. foreclosing. Errors are common:
Property value wrong - Request their BPO/appraisal; challenge with your own CMA or appraisal
Income understated - Provide updated pay stubs, new employment letter, or explain discrepancies
If income increased since application, provide new documentation
If they miscalculated, show the math error
Include all income sources (rental income, side work, household contributions)
Property Not Owner-Occupied
Provide utility bills, voter registration, driver's license at property address
If you moved out temporarily, explain circumstances and plan to return
Previously Modified
HAMP restrictions have sunset—most servicers now offer subsequent modifications
Show material change in circumstances since prior modification
Tip: Request the NPV Inputs
You can request the actual inputs used in the NPV calculation. Servicers must provide them. Compare to your actual income, expenses, and property value. Errors are frequent—find them and challenge.
Sample Appeal Letter
[Your Name]
[Your Address]
[City, State ZIP]
[Date]
Via Certified Mail, Return Receipt Requested
[Servicer Name] - Loss Mitigation Department
[Servicer Address]
[City, State ZIP]
Re: APPEAL OF LOAN MODIFICATION DENIAL
Loan Number: [LOAN NUMBER]
Property: [PROPERTY ADDRESS]
Denial Date: [DATE OF DENIAL LETTER]
Dear Loss Mitigation Department:
I am writing to formally APPEAL the denial of my loan modification application dated [DATE]. This appeal is timely submitted within the required appeal period.
DENIAL REASON STATED: [Quote exact reason from denial letter]
GROUNDS FOR APPEAL:
[Choose/modify applicable sections:]
1. INCOME CALCULATION ERROR
The denial states my income is insufficient. However, this is incorrect because:
- My current gross monthly income is $[AMOUNT], not $[AMOUNT THEY USED]
- I have enclosed updated pay stubs dated [DATES] verifying this income
- [Additional explanation]
2. NPV TEST INPUT ERROR
I request the specific inputs used in your NPV calculation. Based on the denial, I believe the following errors occurred:
- Property value used was $[AMOUNT], but actual value is approximately $[AMOUNT]
- I have enclosed a recent comparable market analysis supporting this value
- [Additional challenges]
3. CHANGED CIRCUMSTANCES
Since my original application, my circumstances have materially changed:
- [New job / increased income / resolved hardship / etc.]
- I have enclosed documentation of these changes
ENCLOSED DOCUMENTATION:
[List all new/updated documents you're submitting]
REQUEST:
I respectfully request that you:
1. Re-evaluate my application using corrected information
2. Provide a new decision within 30 days
3. Suspend all foreclosure activity during this appeal per RESPA and HBOR
Please contact me at [PHONE] if additional information is needed.
Sincerely,
[Your Signature]
[Your Printed Name]
Enclosures: [List documents]
FAQ
No. Under RESPA and HBOR, foreclosure must be suspended during the appeal period. The servicer cannot record a Notice of Sale or conduct a sale until your appeal is resolved. If they do, that's a dual tracking violation.
If your appeal is denied, you may still have options:
Apply again if circumstances change (new job, income increase)
Escalate to the CFPB or state regulator
Explore other loss mitigation options (short sale, deed-in-lieu)
Consider litigation if they violated RESPA or HBOR in the process
Not necessarily. You can appeal yourself using the template above. However, if you're denied again, or if there are complex issues (NPV disputes, procedural violations), an attorney can help identify claims and potentially threaten litigation to get better results.