My bank denied my mortgage modification application in California. Can I appeal?

California law doesn't require an appeal period if your mortgage lender denies your mortgage modification application.


I live in California and submitted a loss mitigation application to my loan servicer to modify the first mortgage on my home. I have never applied for a mortgage modification or another type of foreclosure alternative before. The servicer denied my application. Do I have the legal right to appeal this decision?


Not under California law. In California, a law called the Homeowner Bill of Rights (HBOR), which became effective January 1, 2013, used to require servicers to give borrowers the right to appeal modification denials. But the law changed on January 1, 2018.

Now, if the servicer denies your first lien loan modification application, it merely has to send you a denial notification that:

  • states with specificity the reasons for the denial, and
  • includes a statement that you may obtain additional documentation supporting the denial decision by making a written request to the servicer.
Notwithstanding this change in California law, you still might get a chance to appeal the decision.

Laws and Settlements That Might Give You the Right to Appeal the Denial

In the past, homeowners often found themselves faced with a loan modification denial and no way to appeal the decision. Both the federal government and various legal settlements with servicers and banks have tried to address this problem.

  • The federal government implemented new mortgage servicing rules as of January 2014 that generally require servicers to give homeowners 14 days to appeal a loan modification denial. This appeal right kicks in if the servicer receives your loan application 90 days or more before the foreclosure sale date.
  • Under certain legal settlementslike the national mortgage settlement and othersif a servicer denies a loan modification application for a first mortgage, it has to provide borrowers with the right to appeal under certain circumstances. (To find out if your servicer is the subject of any applicable settlements, talk to a foreclosure attorney.)

Getting Help

If you believe that your servicer denied your loan modification in error or didn't provide you with the proper opportunity to appeal the denial, consider talking to a foreclosure attorney to get advice about you what you should do in your particular circumstances.

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