How Long Should My Loan Modification Take


Loan modifications are one of many tools that can be used to help a family that’s in distress and facing Financial hard times. Some families are frustrated already because they may have purchased beyond their means from being oversold.  However, people need to consider the pros and cons of this potential solution because the process can take a very long time. Some people argue other options are more efficient and ultimately a better choice. under certain circumstances this may be true. We’re going to look at how long loan modifications take and why they can potentially take so long.  It’s better to have as much information as you can to make it an educated decision because time is of the essence.

A loan modification can take up to 30 days to 120 days before you get a concrete answer. After talking to many people that have attempted loan modifications, They all have one thing in common. Every one of them brings up the fact that a loan modification takes an immense amount of time. This time factor presents a significant issue when you may have other options available yet you get locked in this path where you end up wasting so much valuable time. The loan mod process can take a significant amount of time depending on the size of the institution providing the lending and can even get denied. Typically speaking, the larger the institution, the more time it will take.

There are only so many factors you have in your control to mitigate the amount of time a loan modification required to process. There are situations where you do everything in your power providing all the correct paperwork only to have a bank lose it. Sometimes three weeks can go by before they even call you to let you know of the issue. Having a good understanding of how the bank you’re working with operates internally is a huge help. Some people have gone to their attorney for assistance so they can even track the progress of their filing. The truth of the matter is you’re at the mercy of the bank.

With some of the larger institutions, your application for loan mod can go through many hands. There are also people that extend beyond the bank who get involved. This factor is dependent upon how your initial mortgage was set up with the investors working with the bank. In many situations,  the institution will cross-reference your information with the original Underwriters. This process alone can take a fair bit of time as there is a lot of inefficient back and forth communication. It can even take as long as someone looking at short selling their home.  Some of the smaller local branches in modest townships can move their paperwork quite a bit faster, but it all comes down to the bank.

Every bank has processes they are required to follow internally from the federal government. They are granted some wiggle room depending on how the state operates. Overall, they will be carefully aligned. This is important to know because one other element you can control is doing your due diligence on the institute itself. When you have a clear understanding of the particular processes of how the bank works internally, you’ll be in a far better position. You can reduce a lot of anxiety when you understand how the bank will handle specific issues beforehand. You can come in very prepared and use this to your advantage.

One other common practice some banks implement many people consider inefficient is something called dual tracking. This process is where the bank has multiple departments working on your file simultaneously. Each department is not fully aware of where the other department is at any given time with regards to your process. For example, one department may be looking into details surrounding your hardship letter and its validity while another department is beginning foreclosure processes. Each department requires original copies of your file. This paper shuffling is hugely inefficient and can be catastrophic if a family is dealing with time-sensitive payment penalties because of their situation.

In conclusion, loan modifications can work for specific situations, but they’re very time-consuming. There are things you can do in your control to reduce the time required process your application. Loan modification process can take up to 120 days in some cases. Understanding the internal operations at the institution you’re working with can go a long way in reducing inefficiencies.


Ian Manta is a successful business owner and lifetime investor in real estate. He has purchased numerous investment properties to grow assets, and develop passive income.