Reply
Contributor
Posts: 79
Registered: ‎08-23-2008
0

Loan Modification

Does anyone know how a loan modification will report on CR? I've seen lots of talk about that on the many credit boards, but I haven't seen any mention of how it is reported. Is is like a short-sale or foreclosure?

Does anyone know????

Thanks

Sorry if I put this in the wrong place.
Smiley Happy
New Contributor
Posts: 85
Registered: ‎06-18-2007
0

Re: Loan Modification

I know that if you are behind on your mortgage now, while awaiting the approval of a home mod, the mtg co will report you as late.
 
 As far as when the mod is approved, I do not believe that it is reported any different.
 
 What I mean is that once you start making your new payments on time it should report paid as agreed. 
 
I'm not an expert, but it seems to me that it is basically the same as if you were to refinance your mortgage.  Your cr would only show the new mortgage co (or same one) but it would not state that is was a re-fi mtg.  I hope this makes sense?  Maybe one of the experts can be of help?
Moderator Emeritus
Posts: 9,252
Registered: ‎03-19-2007
0

Re: Loan Modification

 

Resource Guide for detailed reporting guidelines.

Renegotiated Mortgages:

There are three options for reporting a renegotiated (refinanced) mortgage:

1.

If the original Account Number and Date Opened are retained, modify the amounts and terms as per the renegotiated/refinanced agreement. Fields that may be changed include Original Loan Amount, Terms Duration, Terms Frequency, Scheduled Monthly Payment Amount and Current Balance. A notation that the loan has been renegotiated/refinanced is not needed.

2.

If the original Account Number changes and the Date Opened remains the same, follow the above reporting guideline, and include an L1 Segment with the new Account Number. Refer to the L1 Segment specifications within the Field

Definitions in the Credit Reporting Resource Guide for reporting guidelines.

3.

If the Date Opened changes, report the old loan as specified:

􀁸

Account Status Code = 13 (Paid)

􀁸

Payment Rating = the appropriate code that identifies the status of the account within the activity period being reported

􀁸

Special Comment = AS (Account closed due to refinance)

􀁸

Current Balance and Amount Past Due = zero

Report the newly renegotiated/refinanced loan with the new Account Number, Date Opened, and all other applicable fields. Payment history that occurred prior to the new Date Opened should not be reported with this account.

 

Contributor
Posts: 79
Registered: ‎08-23-2008
0

Re: Loan Modification

So then it really doesn't report negatively then -- right? So why wouldn't everyone mod their loans then? There's no incentive to let it adjust per the original terms of the agreement. Seems odd to me. I've been offered a mod b/c my loan adjusts in 10/09, but I figured there would be some negative consequences to it, so I have just ignored the offers. Maybe I shouldn't be doing that.

I'm not late on my mortgage and would probably be able to pay the adjusted rate (as long as rates don't go sky high now that the financial world is going crazy). Would prefer a fixed rate but don't have the equity in my house to get that, so thought I could possibly do a mod with my current lender. Do they do fixed rate mods?????

Should I try for one now? The property is underwater by 150k based on new market data.

Just trying to figure out the best thing to do. I would like to keep my house.
Smiley Happy
Valued Contributor
Posts: 1,116
Registered: ‎07-12-2008
0

Re: Loan Modification

Get the Mod, I had my mortgage modified and and i had nothing happen in a negtive way on my CR. TAKE IT TAKE IT!!!
CURRENT SCORES: TU: 641 21 Apps / EX: 644 28 Apps / AAoA: 4.4 Yrs. / Util. 28% / Goal: 700 by 7/2/15

Valued Member
Posts: 62
Registered: ‎08-26-2008
0

Re: Loan Modification

When you do a mod, what exactly happends? Do they only adjust they rate? or term? can I have them permenetly mod it.? I have  year, and no equity any more ( I live in Michigan) TY Spooky
Senior Contributor
Posts: 3,299
Registered: ‎04-22-2008
0

Re: Loan Modification

As far as mods go, it is a bank by bank and casy by case thing. 
 
Some are not interested until you are actually in default.
 
Some will say they can not do anything but if you threaten to mail keys to them and walk away they will (be very careful though as threats can always backfire)
 
Some are very helpful in this market.
 
 
Regular Contributor
Posts: 183
Registered: ‎07-21-2007
0

Re: Loan Modification

It depends on the type of modification.  NFCU recently offered mea modification.  I keep the loan number and the term and the interest rate and payment change.  B ut there are lots of diffferent types of modifications out theer.  they should send you a legal docuemtn detailing what is ahppening.

 

in my case I have been told that they will report to meach CRA my bew payment anount but will not mention the modification.  I will be checking soon to be sure this is the case.  

 

but differnt banks, and different mod programs may work differently. you need to talk to the lender to see what is hoing on.

Highlighted
Regular Contributor
Posts: 183
Registered: ‎07-21-2007
0

Re: Loan Modification


want2b_800s wrote:
So then it really doesn't report negatively then -- right? So why wouldn't everyone mod their loans then? There's no incentive to let it adjust per the original terms of the agreement. Seems odd to me. I've been offered a mod b/c my loan adjusts in 10/09, but I figured there would be some negative consequences to it, so I have just ignored the offers. Maybe I shouldn't be doing that.

I'm not late on my mortgage and would probably be able to pay the adjusted rate (as long as rates don't go sky high now that the financial world is going crazy). Would prefer a fixed rate but don't have the equity in my house to get that, so thought I could possibly do a mod with my current lender. Do they do fixed rate mods?????

Should I try for one now? The property is underwater by 150k based on new market data.

Just trying to figure out the best thing to do. I would like to keep my house.

if there are fees, points etc involved attached or a credit check is run you may want to think twice.  But if not it is likely a good deal.  i would collect my questiona and ask the lender.  People here cannot possibly know the details of every mod program offered by every lender.

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.