|By PR Newswire||
|April 9, 2014 06:51 PM EDT||
BEVERLY HILLS, Calif., April 9, 2014 /PRNewswire-USNewswire/ -- Loan modification – a process by which your mortgage lender changes the terms of your mortgage to lower your payments and help you avoid foreclosure – comes with risks to your credit scores. Struggling homeowners often don't realize that when they pursue a mortgage modification, they could be sacrificing their good credit scores. For some people, credit damage is the very thing that makes foreclosure so scary. So it's terribly sad and ironic when these people get a loan modification approved only to discover their credit has been trashed in the process. I'm going to tell you how to mitigate the damage loan modification does to your scores and come away from the process with your credit rating as intact as possible.
Although the government's official Home Affordable Modification Program does not require you to miss payments in order to get loan modification, your bank's program might. Here's the rationale behind the "you have to miss payments or you can't get a loan modification" idea. They don't want to modify your home loan. Don't get me wrong, foreclosure is pricey and while most states allow lenders to sue you for those costs, that's just additional time and resources the lender has to put up. A loan modification reduces the bank's profits. So if you're still paying your mortgage – no matter how hard that mortgage payment makes it for you to get by each month – your lender figures you can continue making that payment. In the lender's eyes, if you're not missing payments, you're not hurting and thus don't need a mortgage modification. Every time you miss a mortgage payment, even if you do it strategically just to qualify for a loan modification, your credit takes a hit. The worst part of this is that the better your credit is, the more missing mortgage payments hurts your score. For example, if you have a credit rating of 750 and you miss a mortgage payment, you could see your score drop 100 points overnight. Because the FICO scoring formula is a trade secret and the other entries on your credit report play a role in the points you gain and lose, there is no surefire way to know exactly how much a single payment hurts you. The bank, of course, could care less about your credit. The credit bureaus are the same.
So what do you do when your credit is destroyed and your bank has agreed/disagreed to modify your loan? You still need a place to live, right? Well that's where American Capital Revitalization Group comes in. If you are in the process of a modification or you haven't started yet or you need help putting together your packet for your modification, WE CAN HELP! Don't let your lender bully you into destroying your credit to just deny you 6 months down the road.
At American Capital Revitalization Group, not only can we put together your financial package but we can guarantee to have you approved and living with a lower monthly mortgage payment. PLUS after your modification is complete our seasoned credit revitalization department can help you restore your credit so you and your family can start saving money every month on lower interest rates on other financed items.
For more information please go to our website at www.ifixcredit.org or please call 855-273-5051 and speak to one of our very knowledgeable representatives.
SOURCE American Capital Revitalization Group