Upside Down Mortgage

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Loan Modification Credit Report

Question: Will a loan modification, on my 1st mortgage, effect credit bureau?

I am applying for a loan modification. If I decide later to sell my home, will this loan modification effect my credit report, so I am unable to purchase a new home?

Answer: As long as your credit is not terrible already from missing mortgage payments, A loan modification will usually not affect your credit score as long as you stay current.

Important things to know before you get Trade Lines on Credit Report! 25-75 Points!

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Loan Modification And Credit Report

Question: Why does your loan have to show delinquent in order to qualify for a modification & is there a way around that?

My friend has signed up for this program with Wells Fargo, but she said that she had to miss August payment so she could be 30 days late, have her credit report reflect delinquent and then she would be eligible. Her husband's income changed, but in 3 years she has never been late. She has suggested I try this program due to my income changing, but I told her no because I have never been late on my mortgage, and I was told that your account stays in delinquent status for 7 years even if you are current that delinquent indicator will still stay there. If there a way around this?

Answer: You DO NOT have to be delinquent!!! I repeat DO NOT!!! Now when working directly with the bank they will reject your loan modification proposal from jump, if you have never been late. It is not impossible to get a modification accepted but it is not as easy as someone who has been late. I know of a loan modification company that works with people that have never been late but are now experiencing financial hardships. You must prove that you are close to the point that you are not going to be able to pay and will then become delinquent. You also have to pay anywhere between 1k - 5k depending on the company to get this done and a lot of private modification companies will not guarantee a payment reduction. In fact, I have come across people that their payments actually went up!!! You need to call your lender/loan servicer to see if they will work with you first. You may want to get a Forensic Loan Audit (FLA) done. A FLA examines all your loan documents to make sure that you loan was completely compliant and that all "i's are dotted and t's are crossed". If the loan is found to contain violations then this can be used a leverage tool to kind of "twist" the lenders arm into negotiating the terms of your current loan.

Loan Modification-Overview (MRG)