5 Reasons why loan modifications are denied.

1-80% of all loan modifications fail to make the first 3 payments because the reduction is not significant enough for the borrower and a principal reduction is usually not an option. 

2-The HAMP guidelines are so strict that only 4% qualify. 

3-If the lender reduces $300 per month, they must show this loss for the life of the loan to their shareholders so they rather lose some now and foreclose so they can reinvest that money. 

4-Once you start a loan modification request, the bank orders an appraisal and title search to see their position to determine if it is in their best interest to take the property now rather than working out a deal with you.

5-Loan mods are processed by the servicer and not the actual bank. Servicers make little profit servicing the loan but make around $6,000 if they have to foreclosure for the bank. Is approving a loan mod in their best interest?