Though lenders typically want to avoid a foreclosure as much as the homeowner does, they are not necessarily obligated to approve all applications for a Loan Modification. There are few circumstances in which your application for a loan modification may be denied, or possibly not even reviewed. The following may limit your chances of a loan modification approval: Paperwork errors or missing information/documents The most common reason for loan modification denials is unqualified applicants due to missing/inaccurate documents. Some lenders will not even continue reviewing an application if required information is missing. Applying too early Homeowners typically must be past.