Post by LMHC on Aug 15, 2009 16:35:58 GMT -5
On September 14th 2009 the U.S. Treasury will request Lenders/ Servicing Companies, involved with the Making Home Affordable Program, to start submitting information collected from an applicant under this program be sent to the Treasury for recording purposes. Read the entire document here www.treas.gov/foia/privacy/74%20FR%2038484.html to see what all they will be doing with your information.
Some key information they will be collecting and holding on record for seven years:
This system of records contains loan-level information about individual mortgage borrowers (including loan records and financial records). Typically, these records include, but are not limited to, the individual's name, Social Security Number, mailing address, and monthly income, as well as the location of the property subject to the loan, property value information, payment history, and type of mortgage.
This leads to an all to common question, “ Will my credit score be affected by doing a loan modification?”. The answer to this is YES it may be affected, depending on how your Lender/ Servicing Company chooses to report this to the Government. As you can see below from the Treasury document, credit agencies amongst others will have access to the documents and information being recorded. Read the document above to see a list of who all will have access to this information.
(6) Disclose information to a consumer reporting agency to use in obtaining credit reports;
If you go to the Fair Isaac website and look under there FAQ section you will find this question,
Q. “ How does a mortgage modification affect someones fico score?”
A. That depends on how the creditor reports the change to consumer reporting agencies. If it is reported as some version of “ loan not paid as agreed” then the change could lower the borrowers credit score.
Anyone involved in doing a loan modification be it home owners, Lawyers, loan modification Companies, Brokers, Realtors, etc… should be asking the Lender/ Servicing Company exactly how they will be reporting this modification to any monitoring agency involved. It would be a good idea to have them give it to you in writing so you have a record of this in case later on it suddenly appears on your credit report differently.
Also, if you are a third party modification help company and you are advertising that a loan modification will not affect your credit score ( I see plenty of them saying it) I suggest you stop advertising that, as you are misleading the general homeowners that are involved in a loan modification. Change it to say that your score may or may not be affected by a loan modification process, each Lender/ Servicing Company reports differently to credit agencies and it’s at there discretion on how it will be reported.
Some key information they will be collecting and holding on record for seven years:
This system of records contains loan-level information about individual mortgage borrowers (including loan records and financial records). Typically, these records include, but are not limited to, the individual's name, Social Security Number, mailing address, and monthly income, as well as the location of the property subject to the loan, property value information, payment history, and type of mortgage.
This leads to an all to common question, “ Will my credit score be affected by doing a loan modification?”. The answer to this is YES it may be affected, depending on how your Lender/ Servicing Company chooses to report this to the Government. As you can see below from the Treasury document, credit agencies amongst others will have access to the documents and information being recorded. Read the document above to see a list of who all will have access to this information.
(6) Disclose information to a consumer reporting agency to use in obtaining credit reports;
If you go to the Fair Isaac website and look under there FAQ section you will find this question,
Q. “ How does a mortgage modification affect someones fico score?”
A. That depends on how the creditor reports the change to consumer reporting agencies. If it is reported as some version of “ loan not paid as agreed” then the change could lower the borrowers credit score.
Anyone involved in doing a loan modification be it home owners, Lawyers, loan modification Companies, Brokers, Realtors, etc… should be asking the Lender/ Servicing Company exactly how they will be reporting this modification to any monitoring agency involved. It would be a good idea to have them give it to you in writing so you have a record of this in case later on it suddenly appears on your credit report differently.
Also, if you are a third party modification help company and you are advertising that a loan modification will not affect your credit score ( I see plenty of them saying it) I suggest you stop advertising that, as you are misleading the general homeowners that are involved in a loan modification. Change it to say that your score may or may not be affected by a loan modification process, each Lender/ Servicing Company reports differently to credit agencies and it’s at there discretion on how it will be reported.
