Financing in 92692>Question Details

Julie, Other/Just Looking in 92692

I applied for a loan modification and was approved by my lender. It's not a tradtitional loan mod, it's the

Asked by Julie, 92692 Fri Jul 10, 2009

new Home Affordable one. It can take 90 days to complete the paperwork and make it final, but the new lower payment starts immediately. Anyway, I have been making my payments on time and have not been late yet. My question is this: If I now make this lower payment, will it look like a late payment on my credit report because it will look like a partial payment since the loan mod isn;t finalized yet?

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It will show your payments are on time, but your loan balance is going to go up. Typically loan mods are interest only, and some are negative amoritization, which means your payment will not even pay all the interest due. So your balance will actually increase. But that's OK for some of us, if it keeps you a house you love, and children in the same school. Just be prepared that at the end of 3-5 years they readjust the payment back to a fully amoritized payment which could cause it to increase dramatically. If you pay on time and improve your credit, after a year you could fully refinance and have a great new loan with low interest rate. Hang in there!
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0 votes Thank Flag Link Thu Mar 8, 2012
Great Question! Absolutely agree to get in writing that you have been approved for the loan modification and that the Lender has approved a new monthly payment effective immediately even though the papers will not be signed for 90 days.
That being said, the credit reporting agencies can only report what is recorded with the Lender. If the Lender does not change the terms & conditions of the loan for 90 days, it will look like you are making partial payments which can result in your credit report showing delinquent payments.
To be 100% sure that the credit report is not reflective of late payments, the best solution if possible is to make the full payment for the next 90 days until the new loan docs are signed. If this is not possible, then you could correct the errors on your credit file after the fact with the agreement from the Lender as long as you received it in writing.
You've come this far with a good credit standing and a successful loan modification and if you can get through the next 90 days, your credit will have no blemishes.
Congratulations on a job well done!
0 votes Thank Flag Link Mon Feb 20, 2012
GET IT IN WRITING. It not only makes sense, it will be the only way you actually know that you have a modification. This is very tricky water. The bank's object is always to get as much from you as possible. If it isn't in writing it never happened.
0 votes Thank Flag Link Wed Dec 28, 2011
I strongly urge you to get any commitment in writing. Be sure that the offer states clearly your monthly obligation.

Monitor your credit report as well. can be a benfit to you IF you monitor it and IF you can remember to cancel the service when you no longer need your credit to me monitored.

Best wishes and BIG CONGRATS on a successful loan mod. They are not all that common!
0 votes Thank Flag Link Sat Aug 22, 2009
No, you just making the payments on time, you're fine.

Look at this blog it will help you to learn more about your situation.
I've got most of my answers there as well.

Good Luck.
0 votes Thank Flag Link Tue Jul 21, 2009
Hi Julie,
Hope you have called and found out when the bank wants you to adjust the payments! Best advice all ways ask twice.
0 votes Thank Flag Link Mon Jul 13, 2009
Make your full payment they will refund on keep in an escrow account any surplus.
0 votes Thank Flag Link Mon Jul 13, 2009
Hi Julie,

I'm not sure either....but this would be the time to negotiate with the lender to make sure that you've asked for them to correct your credit report. A loan modification is going to show up on your report.

Be sure and let us all know what happens.

0 votes Thank Flag Link Fri Jul 10, 2009
Talk to the lender and make sure that they give you something in writing showing the payment has been modified for the new date. This way if in the future it shows up on your credit report you have proof to verify the change.
0 votes Thank Flag Link Fri Jul 10, 2009
You need confer with your mortgage broker or lender determine status and has details all required anwers

National Featured Realtor and Consultant, Mortgage Loan Officer, Credit Repair Lecturer
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0 votes Thank Flag Link Fri Jul 10, 2009
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