Denying or approving your loan depends on your lender's rules, but you may be able to reduce the amount that is available to you by having the loan serviced by another lender or even a commercial credit rehabilitation organization. The loan servicer is a third party that deals with the loan to determine when payments must be made. This means that the loan is serviced by a third party, rather than the lender, but the loan servicer still makes money.
The most important factor in your loan denial is your creditworthiness, not whether you can afford your loan. If you can't repay the loan or if you don't qualify for a reduced amount, the loan may be canceled and your credit report will show the loan was declined. However, this is only a provisional decision, as you could get the loan approved again. If your denial was based on credit documentation, a credit counseling agency can be helpful. To find one near you, contact the Better Business Bureau at 800-345-7300 or visit www.bbb.org. Also, visit the National Association of Consumer Advocates at 1-800-873-8802 or visit www.ncacadvocate.org.
You may be able to get a different form of help, such as forbearance or deferment. But before you start looking, be sure to check with your lender and ask about the loan's forgiveness program.
If you find a way to keep paying your mortgage, it will be easier to apply for a different loan, which will be easier to get approved.
Do I need to pay taxes on my forgiven debt?
Yes. You should report all forgiven debt as income on your tax return, keep in mind your mortgage as well. See How to Pay Off Your Existing Mortgage or Your Home Equity Line of Credit, if you haven't already, to learn how to report your forgiven debt as income.
How can I get another mortgage if my debt is forgiven?
If you are repaying a loan that you are forgiven, there are several ways to qualify for another mortgage. To qualify for a mortgage, you may be required to establish income or assets to show that you can repay the loan. You may also be able to get a mortgage even if your debt is not forgiven. You'll want to contact a licensed lender to make sure your situation meets the requirements. What if I have more questions? Ask us! We're here to help. We have created a number of resources on our website, including a checklist that lists all the loan repayment assistance programs in the United States. You may also be able to find additional information about the Federal Perkins Loan, Federal Direct Subsidized Loan, Federal Direct Unsubsidized Loan, Federal Family Education Loan, Federal Perkins Loan PLUS Loan, and Federal Direct PLUS Loan. To access the resources, visit www.hud.govwelcomeassist-loans. You can also contact us. For questions related to loans under the Higher Education Act, call the Federal Student Aid Information Center (FAIC) at 1-800-433-3243. There is also a telephone number you can call to ask questions or file a complaint with the Federal Student Aid Information Center, which can be found on the front of the U.S. Department of Education website regarding all no credit check loans made online. We also encourage you to file a complaint with the Ombudsman for Students and Parents, an independent federal agency that is dedicated to ensuring that students and parents have access to fair and equitable programs and services.