Modification of mortgages?

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I own my primary residence for 4 years now and never late mortgage payment. Recently, I received a letter saying that my lender, we offer a loan modification, but I do not know. How does it work? Will it affect my credit?

3 Comments
  1. Reply
    Spock (rhp)
    May 16, 2011 at 6:25 am

    yes, it would. it’ll show up on your credit report as a loan modification.

    a formal refi would not ding your credit.

  2. Reply
    Landlord
    May 16, 2011 at 6:33 am

    Yes it does.

    The letter may no even be from your lender, there are LOTS of scams regarding modification.

  3. Reply
    Kimberly Hill
    May 16, 2011 at 7:21 am

    First, you need to call your lender and ask for clarification regarding the letter you had received.

    Loan modification is a modification to an existing loan made by a lender in response to a borrower’s long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default.

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