Posted on Wednesday, August 19, 2009
A new "guideline" for lenders reporting modifications to credit bureaus is slated to come on line in September. Unde the new criterai, lenders may classify a modification as a "partial payment" of the mortgage which in turn could add a ding to a borrower's credit reports.
As with any other incidnt, the exact amount of the ding dpends in part on what the rest of your credit report already looks like but as well know by the time most borrowers get to a modification they've already been late to pay and their credit report shows it. This new criteria is predicted to add up to another 50 point ding and stay on your credit report for 7 years.
Not all lenders have to handle this the same way and it is unclear whether borrowers will still be able to negotiate this issue.