Maintaing affordable home loans with mortgage modification plans remains a cornerstone of the Obama administration’s housing relief programs for distressed homeowners. Obama’s mortgage relief team allocated $75 billion for an initiative that would reward loan servicing companies for reducing mortgage payments for five years, after which they would rise to today’s current mortgage interest rates which,  remain in the glorious 5% range.  How long will that last? Nobody really knows…

By now, most homeowners understand that a foreclosure judgment is a “significant ding” that will reflect in the credit score and perception of manual underwriting for many years to come. Being delinquent on your home mortgage payments is a serious issue, but if you or your loss mitigation company are already negotiating with your lender, it certainly doesn’t hurt to attempt to get the lender to remove the delinquencies. It’s amazing how powerful a letter from the creditor says that they “made an error in reporting.” But several readers recently wrote to Lisa Sitkin, in an effort to get clarification on the impact of loan modification and the long standing credit implications. If the lender doesn’t agree, consider credit repair.

Borrowers should also request that prior past-due derogatory comments on the credit reports be changed to reflect new current status after the mortgage loan modification. Read more at Credit Hit from Wave of Loan Modifications?