Saturday, November 7, 2009

How Note Modification Affect Credit Report

There are several ways a lower my mortgage payment may impact your credit score. Getting a mortgage workout does not automatically mean your credit adjusted, however, many people think that affiliate mortgage modification automatically impacted negatively and that is just not correct.

Homeowners who are current on their mortgage payments and have negotiated a permanent loan modification, without first going through a trial attorney loan workout will see no adverse affects on their credit reports. Remember that in order for your credit to receive a negative check, you as the homeowner either have to be late on the note payment or have not paid the monthly payment in full based on the original mortgage agreement.

If you have not been making your loan payments and you apply for a note workout, your credit score will have already been affected. For example, if your monthly payment is due on the first of December and you fail to make the payment by January first, a 30 day late entry will be added to your credit score. If a payment has not been made by February first, a 60 day late entry will be added.

In the past year, lenders have increased the number of attorney mortgage modification that they are agreeing to due to the addition of federal programs such as Making Homes Affordable and the Home Affordable Modification Program. In the past, banks relied on their own loan Alteration programs, but with the government incentives offered by MHA and HAMP programs, the volume of loan workout reviewed by banks has increased. With that in mind, the addition of these new programs usually requires the homeowner to sign up for a trial attorney mortgage modification as the lenders determines if you qualify for a permanent attorney mortgage workout during that trial period, which is usually three months. During that three month period the homeowner is required to make the new trial note change payments on time, else the permanent modification will be denied.

One of the main negatives of the trial loan Alteration ( is that the homeowner will receive derogatory marks on their credit report, even if they do at the end of the trial period qualify for the permanent modification. In general during the trial period, the homeowner will still receive a 30 and 60 day late entries on their credit report because they are not making the full payments as agreed upon in their original loan. Instead, the homeowner has agreed to a trial attorney mortgage workout at a lower payment.