I highly disagree that Loan Modification can affect a consumers credit report. In fact this is a negative way of commuiciating to homeowners about how to overcome the foreclosure.

Late payments over time will ruin a consumers creit report and this is commonly known. A loan modification does not have a negative impact on your credit report. In fact, a loan modification may be the very best way to maintain good credit as long as it makes your monthly payments more affordable.
This article lacks accurate information and enough substatinal research. If the lender is unable to successfully achieve a loan modification the first time their is no penalty of attempting one until they are successful.

Help for homeowners is available. Homeowners should be taught how to look for the right modification company or how to successfully complete one! The following link is a 60sec video that gives hope in a time of distress!
http://www.advancecenter.net/will-loan-modification-ruin-my-credit-score.html

This isn't a matter of what you agree with or not. It's what the industry has decided to do. The credit bureaus made a guideline and the big banks are following it. I would assume the small ones will, too. The facts are what they are and in this case, they're negative.

This is a battle worth waging.

Keep up the good work.

Harriett,
Good morning.
I have been following some of your recent articles concerning mortgage modifications and short sales and am slightly perplexed. What seems to be missing in your "appraisals" of these tools is that they are designed for those who find themselves in extremely precarious waters. Yes, ANY change to you mortgage status has an impact on your credit score, in fact every purchase you make with a credit card has an impact on it, but what seems to be lost in your articles is the fact that many of these people have NO OTHER OPTION.
Back in the early 90”s, my wife and I had a business that went under. During that season we ended up filing for bankruptcy and ended up losing our house AFTER the bankruptcy to foreclosure. This was in South Florida and at that time there were NO OTHER OPTIONS available. Short Sales were not even on the radar yet. Was our credit affected? Absolutely! It took 10 years for it to come off our credit report. (the foreclosure took two years to play out) A short sale would have been a savior.

Yes, mortgage modifications and short sales can have credit score implications, but the alternative is far worse. When a home owner goes past 90 days late, their credit score can drop as much as 200-250 points. Do you think at that point another 50 really matter to them. They are swimming as fast as they can against a tide that cannot be beat…UNLESS someone throws them a life ring. Since losing my home to foreclosure I decided to get educated in these matters and am now a Realtor that specializes in working with distressed property owners. The relief that my clients receive when we can negotiate them out from under their burden is probably the most satisfying part of my profession.

I would hope you would take this to heart before throwing all of the life preservers into the credit score boat and pushing it farther away from those that need it most.

Thank you,

George Tifft, CDPE (Certified Distressed Property Expert)
PrudentialCT Realty

gt.prudentialct.com
cdpenow.com