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

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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?

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    researched it
    February 11, 2011 at 1:21 pm

    You do not have to have a delinquency. That is not correct. You do have to show that you cannot afford the current mortgage. You can do this if you have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31 percent of your monthly gross (pre-tax) income. And you have to have a documented financial hardship — lost your job, health care problem, etc.

    If you look at the requirements for the federal loan modification program it does not require that you be delinquent.

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