Real Estate

Loan Modification Can Hurt More Than Help


* Loan modifications stave off foreclosure, but damage credit.

* Modification causes credit score damage that lasts for long time.

* On-time payments can help reverse credit score damage.

Mortgage loan modification and credit scores

Homeowners struggling to make their house payments may seek a mortgage loan modification in hopes of avoiding foreclosure and protecting their credit score. However, loan modifications also take a toll on those scores.

In theory, a loan modification should be a mutually acceptable solution to an out-of-control mortgage debt. The homeowner gets a workable payment schedule and the lender gets at least some of its loan repaid.

In practice, it’s not that simple.

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By Diego Loya

Diego Loya is a Realtor - Broker at Home Living Real Estate Brokerage, a Orange County full services real estate company. Over the past 12 years, Diego has helped homeowners sell and buy their homes. He's loves educating and empowering real estate consumers. You can find him on Google, Facebook and Twitter.

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