Wanda Wilkinson

Loan Modifications have become very popular recently, helping a large number of home-owners change the terms of their mortgage loans to become more affordable.  Despite the fact that these modifications were helping consumers stay in their homes, there was a downside.  Under the Loan Modification guidelines, lenders would report a mortgage as “partial payment plan”.  A partial payment plan statement on your credit report is considered seriously negative and can have a significant negative impact to your credit scores. 
 

Good news for people considering a Loan Modification.  As of November 1^st, 2009, new guidelines became available for mortgage lenders to report loan modifications as “Loan Modified Under Federal Government Plan”.  This new way of reporting loan modifications does not have any negative impact to a consumer’s FICO scores.
 

This new reporting guideline only applies to loan modifications under the Making Home Affordable plan.  For anyone seeking a loan modification, do your research to make sure the loan modification is a government plan.  If not, you run the risk of having it reported under the pre-November 1^st guidelines. 
 

The difference between good credit and bad credit could mean qualifying for a mortgage loan or credit card and getting the best interest rate on an auto loan, personal loan, or even paying a lower premium on insurance.  As an expert in all areas of credit, I can educate anyone and help them to build a specific plan to improve credit.  Contact me to schedule an appointment to put you on track towards a better financial future!