Posted: Tue Jun 16, 2009 10:37 am Post subject: Information on Mortgage Modification and Credit Impact
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I have excellent credit and am six years into a 30 year fixed mortgage. I have never missed nor been late on my payments. I was recently laid off and decided to explore a workable solutions option that my motgage company was offering. They are offering me an option of reducing my payments by 20% given my payment history and my current financuial situation. I asked if thiswould affect me adversely from my credit rating standpoint. And they said it would only show that I was in a payment plan with my mortgage company. My question: Will this have any adverse affect on my credit score? I ask because I have worked very hard at keeping my credit at a top level and wouldn't want any help that would hurt me. Your response wuld be greatly appreciated.
We can no longer take you seriously. Your posts regarding your personal situation do not make any sense and they contradict one another. Here you say that you have excellent credit. However, this other post http://www.mortgagefit.com/predeal/about22301.html indicates that your score is near 520.
It may be situation occured about my friend, I am refering as my situation thats all.
I am here to get more knowledge in different scinario so i am asking such queries which my friends discuss with me. Through this forum i am guiding them properly.
I will thanks forum for simplifying some tedious quries of my friends though i reffer those queries as mine, Not want to mension their identity.
Posted: Wed Dec 09, 2009 8:08 pm Post subject: Loan Modification and Bankruptcy
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My best friend is in the process of a nasty divorce. She will be left with astronomical credit card debt. As she still has 2 children at home,she is trying to save her house by looking at a loan modification. She has been advised by her husbands attorney that she cannot file bankruptcy and apply for a mortgage loan modification at the same time. Is this true? Or is the other attorney just blowing smoke?
Is your friend filing bankruptcyChapter 7? If she is, then she will have to reaffirm the mortgage and make payments on time. After reaffirming the loan, she can apply for a loan modification. If it is Chapter 13 bankruptcy, she will have to follow a repayment plan to pay off her debts. She can apply for the loan modification and then, once it is accepted she can file bankruptcy and continue making payments as per the modification plan.
confused Guest
Posted: Sat Mar 13, 2010 12:31 pm Post subject: Loan Modification vs Refinance
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I'm so glad that I find your web site and this forum with so many helpful information regarding mortgage loan mod. and refinancing. I bought my house back in 2004 in the amount of $200K, we paid $10.5K for closing cost (included prepaid property tax and insurance) plus 10% down, to avoid PMI we went with 30 years fixed rate with two loans 80% loan at 5.875% and 10% loan at 8.375% (balloon, the loan officer wasn't very clear about this and later I found out that our payment mostly went to interest and even it's 30 years but when we reach 15 years mark we'll have to pay a sum of $15K). I was upset but there's nothing I can do about this except put in extra principal and trying to save money to pay off this 2nd loan. Finally I had enough $ to pay off this 2nd loan. At the same time I was looking to refinance to 15 years loan term since I can afford to pay more and pay off faster. I found this mortgage company and agree to do refinancing with them (after comparing, this is the best of choice for my case), but when the appraisal came with the value $20K lower and this means I don't have 20% equity and if I want to refinance I'll have to pay PMI. I really want to go with shorter loan term with lower rate so I was comparing if I should continue paying extra principal to my current lender or should I refinance, either way the out of pocket expense is the same, my current lender BoA has a really helpful online calculator to help me figure out which decision is better. In my case doing the refinance with 4.375% for 15 years (even I have to pay $3500 for closing cost plus $3200 for prepaid expenses) is better. To reach the same 15 years goal with my current lender my monthly payment will be higher than and the total cost is a lot higher. We were able to close our refinance in 2 weeks from the time we start, wired a big fund to the title company to cover all closing cost, prepaid expenses plus the amount to brought our loan to 80% to avoid PMI. I was happy that I made the right decision. Then, my friend told me about her friend didn't have to pay any closing cost with the loan modification program, her monthly payment is now a lot lower, easy process, her bank took care of everything in a very short time. I was curious so I spent a lot of time researching this loan mod. program, this is how I understand it: this program is to help struggle homeowners to lower their monthly payment/ help avoid foreclosure but to qualify homeowners have to meet certain criterias and that they are struggle with current monthly payment, this program is to help people to keep their house but not for everyone (including me). But I was confused when I found out about that the friend of my friend (as mentiond above) lives in a very fancy house and doing well financially but according to her she got this good deal with loan mod. that brought her monthly payment down and her lender also reduce the principal and now the amount she owes is a lot less, all this unbelivable good deal costs her nothing. I just couldn't believe this so I made effort to talked to more people who went to do loan mod. instead of refinance and their stories are very similar to the one above, every of them didn't have to pay closing cost like I did, their current monthly payment is a lot lower than before , they owe less because their lender reduces the principal. I just can't understand that they're all doing well financially but still approved for this program. They laughed at me when I told them that I had to refinance and paid closing costs for a lower interest rate. They laughted at me when I told them that this program is to help struggle homeowners. One person even said "yes, that's the purpose of this program, but anyone can receive the benefit if they know a way or the person to help them..." Everything sounds too good to be true. Every business has to make profit to survive, but in these cases the lenders were so generous to their customers. I read many stories online regarding the people struggling to get approve for their loan mod. and that the people who truly need help can't get it. I'm so frustrated now. Is it possible that this program can erase all late payments, late fees... reduce interest rate, reduce principal? in the meantime the participants can still keep their current loan term? nothing adds to the back of the mortgage end? If not then how did the above people got these benefits.
I'm sorry for the long letter. I'm very confused and need someone to help me understand more about this program.
You have understood the loan modification program correctly. It is program for those who are facing hardship in paying off their mortgage dues. The lenders offer this program to the borrowers depending upon their financial situation. Lenders won't accept a modification request for those who are financially well off to pay off the mortgage dues.
Thanks
tes Guest
Posted: Sat Mar 20, 2010 10:53 am Post subject: remodification
I guess, you're speaking about loan modification. It does affect credit score to some extent - your score may get reduced by around 50 points. _________________ Good is the Enemy of Great.
Too kind Guest
Posted: Tue Jan 25, 2011 7:57 am Post subject: Divorce and removing name
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In the divorce decree he was to refinance into his own name or sell the house. We have a 10 year old son. I live in an apartment. He did not qualify to refinance as he makes less than me. He did however get a loan modification, but they wouldn't do it without leaving my name on it and like a dummy I signed it so our son has a place to be. My question is this: Would the judge look at me like I was crazy if I tried to enforce the decree when I signed the loan modification after the divorce was final? He is planning on getting married in august and I want my name off the loan.
Unless your ex-husband refinances the mortgage in his name, you will remain liable for paying off the dues. So, you should ask your ex to refinance asap. If he doesn't do so, then you can take legal help in this matter. _________________ Procrastination is the enemy of your financial success
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