Summary Box: Homeowners see credit scores sink after signing up for mortgage relief
By APFriday, March 19, 2010
Summary Box: Credit score can drop after loan mod
AN UNWELCOME SURPRISE: Homeowners who enroll in the Obama administration’s loan modification program can see their credit score dip by as much as 100 points. That makes it harder to get a loan and can hamper your ability to get a job.
WORSE FOR SOME: The impact is greatest for homeowners in financial trouble but managing to pay their bills. That’s because a loan modification is the first sign of difficulty and is reported to credit agencies.
BETTER THAN FORECLOSURE: Since borrowers who lose their homes find their credit is in tatters for years, a loan modification is probably still the best option.
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