is there a negative impact on ones credit if you modify your loan. i ask this because the people who answer the phone in the "emminent default" department of chase now have a statement they read you before they talk to you. they say a mod will affect your credit.
mine dropped because I had to be 60 days behind to get any help. But it's better to get a loan mod and have credit suffer a bit than pay rip off high rate. Credit is more important to younger people I think. When I was 25 no one even heard of credit score--what mattered was affordable loans and paying with cash. Best to get loan mod and save house and then file bankruptcy if they damage your credit score enough--with affordable home loan, auto that runs and cash saved; credit isn't needed anyway
yes i believe so. I was told that it's reported negatively since technically you are not paying the original agreed on amount. I think like most people who are in a situation where they need a modification, I haven't bothered to check my credit cause I really don't care either way right now. When i bought my house and got this loan from Chase in 2006 my middle score was 750. I had great credit. Paid everything on time etc etc. Now i know with all the negative reporting I am in the 500's since my credit card company sends out alerts. I've since walked away from that credit card as well. But as long as i have my house thats all i care about. I don't need credit right now as i am financially strapped thus the reason i needed to do a mod in the 1st place. I figure i'll repair it over the next 5-6 years. By then I assume God willing i will once again be financially stable
I think it has a similar impact as if you "settled" with a CC company. It won't be a default or charge-off, but because the terms had to be modified, it counts against you.
I'm in the "credit is over-rated" camp too. I was well over 700 before my biz tanked and am surely in the low 500s or even lower now, and my life is better.
My plan is to settle my charge offs over the next couple years and get a secured card backed by a savings acct through my bank.
Here are two articles on the subject:
Credit Reports and Credit Scores | National Bailout Application Assistance
FICO says new mortgage changes won't hurt score
It's my understanding that if you're current going into the modification, they must report you as so (likewise for past due). Once the modification is successfully completed, they report the loan as modified - some sort of special code. Impact on the credit score is unknown, but I have seen news where they are considering adjusting the impact the modification may have on your score (or discounting it somehow), considering the depth of the mortgage problem, and that depending on where you are seeking credit, many credit issuers are taking the report - specific to mortgages issues - with a gain of salt, also considering the depth of the problem (impact on number of people), afterall if 10-20% of your target market is affected - thats 10-20% less loans they can make, I'm guessing they'll just use it an excuse to charge you a somewhat higher rate down the road...but why would you be necessarily worried about your credit...isn't this the issue that got you into this mess in the first place????
Chase is reporting me LATE on payments 4/5/6 since the "trial program was only for payments 1/2/3". I have contacted them numerous times and they say, per the fair credit act blah blah blah that they have to report those payments late.
Perfect timing since my wife's lease is up. I need to get her a vehicle, and every lendor won't approve me because I am "60 days past due on my mortgage" and owe a balance of X$$$.
WTF? They are dragging their feet, stringing me along, and now reporting me late even though I am making the exact payment they want me to?
smit - I don't know how much it's worth to you or want to pursue - but if you can verify the guidelines as far as credit reporting while in the modification (I think it may be detailed in the Supplemental Directive 09-01 issued 4/6/09 by the Treasury Department.), confirm that Chase has fallen outside of these guidelines, you may have a legitimate legal complaint on your hands, considering from what you state you've been denied credit based on inaccurate information - but need to quantify the monetary damages I'm sure....
I'm just at my wits ends with these folks any ideas I can provide I can...I'm no attorney - but I know a bunch, one works for me, and I work in the finance field - guess you could say I'm a mole for the common man...
The following is an excerpt from Fannie Mae's website, https://www.efanniemae.com/sf/mha/mhamod/rpt/
Credit Bureau Reporting
In accordance with the Servicing Guide, Part VII, Section 107: Notifying Credit Repositories, the servicer should continue to report a "full-file" status report (describing the exact status of each mortgage loan it is servicing as of the last business day of each month) to the four major credit repositories for each loan under the HAMP in accordance with the Fair Credit Reporting Act and credit bureau requirements as provided by the Consumer Data Industry Association (the "CDIA") on the basis of the following:
- For borrowers who are current when they enter the trial period, the servicer should report the borrower current but on a modified payment if the borrower makes timely payments by the 30th day of each trial period month at the modified amount during the trial period, as well as report the modification when completed.
- For borrowers who are delinquent when they enter the trial period, the servicer should continue to report in such a manner that accurately reflects the borrower's delinquency and workout status following usual and customary reporting standards, as well as report the modification when completed.
More detailed guidance on these reporting requirements will be published by the CDIA.
Anybody have an update on this?
It does ding your credit - I decided to simply refinance my loan with another lender rather than wait out the HAMP process w/ Chase, and applied last week - one credit agency didn't report anything and my score was 700+, the other two did report something (although not consistent) and my credit report was in the mid to low 600s from them.
I was current going into a forbearance - although I never formally accepted it (verbally/writing), and paid my full payments to date. They reported my account as in a partial payment plan, the balance of my loan was reported to the respective agency as of the month I entered the supposed forbearance. Apparently, Chase codes the accounts some sort of way that suppresses the customer invoicing, reports it accordingly to the credit agencies, and makes the processing of payments manual.
****s, and I complained, sighting monetary damages - they reversed the coding, and stated they would handle fixing the credit reporting issues within 30 days.
It's showing ups as 5 times 90 days delinquent on our report. We had forbearance first then the modification. Tried disputing it and they just kept it the same.
I worry about an emergency. I'm a self-emlpoyed contractor. If my truck breaks down and I need $2-3K to fix it, but don't have the cash, I charge it, get back on the road. If I have major problem with my house (assuming I still own it) how do I get it fixed? We've spent the last year+ living off cash, because we leveraged everything we had to try and stay current up until the end of 2008. I don't plan on ever getting this deep again, but there will be things you can't account for, and I that's what I worry about.Originally Posted by Smuel123
Don't believe anything you are told regarding no negative information on your credit report, DESPITE what the bank tells you OR what the guidelines say - they don't pay attention to any of the guidelines anyway, legal or otherwise.
We applied for a mod while we were still current with WAMU (after their own bankruptcy for mismanagement btw) and were told NOT TO PAY while our paperwork was being reviewed.
Our mod was approved 8 weeks later (this was late 2008) and as soon as we started to make our reduced payments in Jan. 2009, we INSTANTLY started getting notices from our credit cards that they were raising our interest rates from the low teens TO 20-30 PERCENT (or more).
That was the only impetus we needed to stop paying on the cards - job losses for BOTH my husband and I at the time, which is why we couldn't pay our mortgage.
We had a FICO of close to 800 before mod, but right after the mod and when the interest rate hike notices were going out, our score dropped in less than 60 days to the mid 600s, and now, after making ALL of our step mod payments, etc. we are BELOW 500 and frankly, I could care less.
We pay with cash, and have one smaller limit card for emergencies and will NEVER have another credit card. We had a car break down - sold it as is, and took the small amount of cash and bought an old car that was running/in good shape. Don't need some fancy new car anyway, as CASH IS KING in our new world.
We sarcastically asked one creditor if they would start giving out awards for the LOWEST FICO score, and if so, we asked that we be considered for the grand prize - we were met with complete silence on the lineSometimes you just have to have a sense of humor about all of this - much better to laugh than cry!
Agree 100%. No matter what you do, if you are late, 30/60/90 you will be reported, plain and simple. I hear some say we went right into a trial without ever missing a payment, ok then you were never late.
But 95% of us here in this forum have missed payments. No other way for these banks to take note of our situation. I know 2/3rd of us are afraid to even look at our FICO, but have any of your CC limits been lowered? Then you know for sure you were reported for being late...
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