My Client Got a Loan Modified!!

I feel like celebrating!  One of our clients just got his loan modified for his home on Orcas Island- just about cut in half - to an amount that he can actually afford. He has never been well, but the downturn in our economy and the devaluation of his land was the final straw. I did not know what would happen to him.

This client, like so many fellow Americans has always worked to pay his bills, and made a real estate investment which should of made him some money based on his work on the property. Instead it looked like it might result in his becoming homeless..and bankrupt.  But today, he called and he got a modification! I could not be happier!

There are some hidden downsides to getting help from your lender. Of course the 9 months to a year fighting with them to help you is the first and most obvious nightmare. But what many people don't know is that as soon as you ask for help your credit is affected. It can drop your credit score as much as 100 points according to MSNBC news, as soon as you ask for help EVEN if you have managed to pay your bills on time! So don't be surprised if your credit card companies start notifying you that your line of credit has been slashed to 10% of what it was formerly.


"Why should people's credit be hurt even worse when they're trying to do the right thing?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York.

And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich.

"It's a feeling of being duped," she said.

Credit score issues are an unexpected consequence of the program that has been plagued with problems and disappointing results since its launch last year. Only about 170,000 homeowners had completed the process as of February. Hundreds of thousands more are still in limbo, but one lucky homeowner will sleep better tonight.