Loan Modification – Was your credit score negatively effected when you did a loan modification?

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Please, I ONLY WANT TO HEAR FROM PEOPLE WHO ACTUALLY DID A LOAN MODIFICATION AND WAS CURRENT ON THEIR LOAN WHILE DOING A LOAN MODIFICATION AGREEMENT. Hello, I have a friend who has been offered a loan modification from her bank. She is current on her mortgage and have a good credit score but is struggling to make payments. She has read on the internet the horror stories of peoples credit score plummeting by 100 points after doing a loan modification. She asked the bank will it affect her credit score and they said no, of course right. Want to hear from people have have done a lone modification. Some people state that if you do a loan modification they will report it on your credit as current but a loan modification has taken place and that once a loan modification is on your credit – it is a bad sign because you were not able to stick with the original terms of the loan.

  1. Reply
    May 19, 2011 at 9:38 am

    I used to underwrite loans for a bank who modified loans under their own portfolio. The short answer is of course it will effect her credit. Regardless if she was current & paying on time prior to the modification, when you modify your changing the original agreed upon Note & agreement that she signed. BUUUUUT it depends on what type of mod she get’s. If it only effects the term, where they extend the term out then the bank & investor is still getting the rate charged & the only thing making the payment smaller is the term being extended. But if the bank has to decrease the rate or forgive principal then bank & investor are both losing out big time & of course they’re not going to let that go without some consequence.

  2. Reply
    Mrs Waterty
    May 19, 2011 at 10:17 am

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  3. Reply
    May 19, 2011 at 10:21 am

    Well i think if she is having a hard time keep up on the payments and really needs a loan modification to keep the house.
    Then doing the modification will be better for her credit score than losing the house due to non payment.

    check out the link below on loan modification

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