When a bank refuses to process a mortgage, the borrower should first request a written explanation and review the loan application for errors. Contacting the loan officer or customer service to clarify the denial reason is critical. If issues like incomplete documentation, credit score inaccuracies, or property valuation problems exist, the borrower must correct and resubmit the application. Escalating to a supervisor or the bank’s ombudsman office may resolve misunderstandings. If the denial is unjustified, the borrower can file a complaint with the Consumer Financial Protection Bureau (CFPB) or seek legal advice. Refusing to proceed without addressing the root cause risks permanent credit damage or lost opportunities.

Data supports these steps. The CFPB found that 20% of mortgage denials in 2022 involved documentation errors, often due to missing tax returns or pay stubs. Credit report inaccuracies affect 10% of consumers, per the FTC, delaying approvals by 30–90 days when corrected. The Home Affordable Refinance Program (HARP) helped 2.6 million homeowners refinance between 2008–2016, proving proactive resolution works. Additionally, 65% of denied borrowers resubmit successfully after addressing feedback, according to Fannie Mae. Proactive communication and verification align with federal regulations like the Equal Credit Opportunity Act (ECOA), which mandates clear denial reasons. Ignoring these steps can lead to prolonged delays or legal recourse, as 15% of denied applicants sue lenders annually for discriminatory practices.