Loan Modification Trial Payments - Credit Score Impact

[Anonymous]

Ok.I understand now

[Anonymous]

I still would not do this, who told you they wouldn't report as lates? Do you have it in writing, legally binding? They will report the modification (even without lates), it will show up on your reports.

A modification is very different than a refinance. Have you looked into a refinance and rolling both loans into one? What did your CMA comp come on at - how much are you actually underwater? A realtor will come out for free to give you an CMA - have that information before you make a decision.

Oh and I gasped out loud that you are going from a 30 to 40 year. Wow, that's an extra 10 years plus all the money and months you've already paid......

[Anonymous]

Agreed, would not do and would not add 10 extra years of payments on to save a couple hundred dollars. Taking a sale at a slight loss and bringing cash to closing would be better. Like others said Zillow is a poor estimator of house value.

[Anonymous]

No, I don't have it in writing but I spoke with three different Home Equity representatives and they said since I paid in full April, May and June that the offer they sent out was the final modification offer.   The reduction of principal was not offered in March.  This final offer includes permanent payments and as long as they are paid on time they will not show as late.   Their will only be a "loan modification" noted on the second mortgage.   I just spoke with an attorney and in his opinion the pros outweighs the cons in my particular situtation.

I can not refinance this home.  This is no longer my primary residence (home is rented out managed by a property management firm) and is underwater ~ 19K.

As far as the term stretching out from 30 - 40 years...not worried about that.  My exit strategy includes trying to unload this home over the next 2 to 3 years via a normal sale even if I have to help with some closing costs.

[Anonymous]

I have to look at my exit strategy which is to unload the home within 2 to 3 years.   Extending the terms 10 years on the 2nd is a non-issue for me.  If I was planning on keeping the home then that would surely be a factor.

The couple hundred dollars per month in savings could be applied to maintenance calls or other things versus losing 300 month (rental income vs mortgage payment) which I can't use as an expense on my taxes.    The reduction in principle is huge in that it brings the home almost in line with market value.   Bank drive-by appraisal was 140K in December 2015.   Loan Mod would bring my total balance (1st and 2nd) down to 159K.

It is a tough decision.