Home Loan Modifications Impact Credit Scores
Today, the San Francisco Chronicle reports on the problem of homeowners who get a loan modification and who end up with a ding on their credit reports. The problem is that the banks holding the mortgages report the homeowners are late on their payments or that they are paying less than is owed. Either way, the consumers’ credit scores suffer. This in turn often causes banks to increase credit card interest rates and to reduce credit limits. That in turn may impact consumers’ ability to get credit. There should be a legislative fix for this problem.