How Long Does It Take for a Loan Modification to Be Approved?

When you’re having trouble with money and trying to change your home loan, it can feel like you’re always waiting. You’ve gathered all the necessary documents and sent in your application. Now you’re anxiously checking your email every day to see “how long does it take for a loan modification to be approved?”

Different times are needed to get loan modifications approved, but on average it takes 30 to 90 days. But it can go on longer if a few important things happen:

The Loan Servicer’s Processing Timeframe

Each mortgage servicer has their own processing speeds. Some may review and approve loan mods within 30-45 days, while others take 60-90+ days. Government-backed loans (FHA, VA, USDA) also tend to have quicker turnaround times than conventional loans. You’ll want to ask your servicer upfront what their average timeline is.

Completeness and Accuracy of Your Application

Sloppy, incomplete applications can significantly delay the process. Your servicer will ask for clarifications and changes if there are missing documents, unclear hardship explanations, or mistakes in your income and expenses. To keep things moving, carefully fill out all forms, send in all proof of income or hardship, and double-check for mistakes three times.

Your Financial Situation Complexity

If you have more than one property, different sources of income, self-employment income, or a complicated story of hardship, you will have to go through more hoops. Complex cases require closer review, lengthening the underwriting process. Plain cases with W-2 income and clear signs of hardship tend to go through faster.

Mortgage Investor or Insurer Approval

Government and private mortgage insurers often need to sign off on loan modifications too. This additional approval can tack on weeks or months. Fannie Mae, Freddie Mac, FHA, VA, and USDA loans commonly need this extra green light.

Trial Modification Period

Many loan servicers require a 3-6 month trial period before the permanent modification is finalized. You’ll need to make the trial payments on time and in full to prove you can manage the modified loan terms long-term.

Requesting an Appeal if Denied

If your initial request gets denied, you can file an appeal which restarts the process. But this appeal review usually takes another 30-60+ days. Providing new evidence supporting your hardship or need for modification strengthening your case.

Foreclosure Proceedings

If you’re behind on payments and facing foreclosure, the dual-tracking of the modification review and foreclosure process can cause significant delays and complications. Modification timelines tend to drag out longer when foreclosure is simultaneously in motion.

Common Reasons for Loan Modification Delays

• Backlogs and bottlenecks, especially after natural disasters or economic downturns when modification requests surge
• Loss mitigation department understaffing at the servicer
• Poor communication channels and lack of transparency from the servicer
• Multiple requests for missing documents or clarification of confusing details
• Pending foreclosure action diverting focus from modification review

Strategies for Speeding Up the Process

• Thoroughly complete the initial forms and provide all required proof upfront to avoid delays from missing items.
• Maintain clear communication with your servicer’s loss mitigation team and escalate if issues arise.
• Seek legal counsel to ensure your application is airtight and help negotiate with the servicer.
• Act quickly if foreclosure is imminent to align timelines and prevent dual-tracking conflicts.
• Be proactive following up for status updates if processing stalls.

The anxious waiting game of loan modification approval is frustrating, but being prepared and diligent can help shorten the timeline. While 30-90 days is typical, it’s not uncommon for approval to take 6 months or longer in more complex situations. Patience and persistence are key. But with the right strategies, you can hopefully get the green light faster and find some financial breathing room through an approved loan modification.