Loan Mods & Credit Scores

I have a CA Wachovia Option Arm loan that is at the million dollar mark, and valued in the low 800s.  I have been trying for 7 months to get better terms, mod with PR is my hope.  I have a steady job and good income and haven’t missed payments on CCs or mortgage in 30 years,  But this loan is slowly killing my financial foundation I have worked so hard to build up.  I am at a crossroads now.  Missed my prop tax, and things are getting tight. 

The Executive Offices of Wachovia told me they are only modifying loans that are 31 days late.  They said they are not suggesting to miss, but if I did, call back on day 31, and I would be modded. 

What happens to your credit score if I miss a few mortgage payments before this mod kicks in?  Does the mod also factor into my credit score?  The way my CCs have been squeezing me with balance reductions and cancelled accounts, does a credit score even mean anything anymore? 

I would appreciate your thoughts on this.

Dale

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Hello Dale,

Your credit score would take a pretty huge hit if you were current on everything and then had one 30-day late; you’d find yourself going from the mid-to-low-seven-hundred-range down to the mid-to-low-six-hundred-range instantaneously. 

A loan modification permanently modifies the promissory note and the Fair Credit Reporting Act would require that a loan be reported to the credit bureau based on the modified terms. 

A credit score matters, but it’s definitely not the first and primary concern.  For example, when a consumer is going through debt settlement, the credit score is secondary to settling debt at favorable terms.

Thanks for the questions and hope this helps.

Paul Jerome