First, loan mods are usually a very bad idea. There's a huge problem in the mortgage industry with these loans---there's no paper. Meaning, the original note, which was supposed to be safeguarded like their lives depended on it, no longer exists for millions of loans. That in itself does not make the loan go away, but it does open you up to major problems. For example, I've been fighting my own mortgage battle since 2010. Between 2006 and 2013, the original creditor "sold" my note at least six times that I know of. Let that sink in a minute. Imagine you owned a car, and wanted to sell it. So, you sell it to me. A year later, you have no authority to sell that same car to someone else---it's not yours anymore. But that's what happened all too often. There are literally multiple copies of my "original note" out there, and so far, I've learned of six separate sales...within the past 4 years, there have been five different entities--including the original lender still trying--all trying to claim they were the holder of the same note, and trying to enforce it. It's not legally even possible....and it is fraud.
You can see the massive problems that this produces.
So anyway, the loan mod was, at least in part, designed to cover up that problem. You see, once you agree to a loan mod, you create a brand new contract between you and the party offering the mod. Notice that there's nothing in that agreement that guarantees that the party you're entering into a mod with even has the legal authority to modify your loan!
But I digress...I could take up your whole day if I don't stop myself now. The question you asked is a lot more common than you may think. The issue is one of evidence. Does your friend have anything in writing, or any recorded phone calls(if that's legal in their state)? If you have no evidence that they promised to remove lates from the credit report, you have no way to force their hand. It becomes your word against theirs, and when that happens, they will win that battle. If you have any evidence, anything in writing, where they promised to remove lates from the credit reports, let me know, because that's different. But unfortunately, many of these pretender lenders will promise nearly anything to get you to take a loan mod. Once you sign that paper, they can take that to court and use it as all the proof that's needed to foreclose. That's a big deal because with so much fraud having taken place in the mortgage business over the last 15 years or so, legit evidence that they do hold the real note is usually nonexistent. So, homeowners think they are getting help---what they are really getting is a fast track to foreclosure if they do not pay on the loan mod.
