Loan Modifications affect on qualifying for a home loan at Lake Tahoe

 I have recently had several clients who have been requesting a new Tahoe Mortgage to buy a home after having a loan modified. Although the loan modification itself does little if nothing to hurt your credit score, the loan modification is a huge issue when applying for a new loan.

 

Conforming loans which are guaranteed by either Fannie Mae or Freddie Mac consider a loan modification to be derogatory credit even if all payments were made as agreed.  Most lenders providing conforming loans will require that the borrower season the modification for 48 months prior to extending a new conforming loan.  If the modified loan was delinquent for 120 days or more, the lender may require a seven year or 84 month seasoning before providing a new conforming loan.  FHA loans have shorter seasoning requirements; in most cases 24-36 months.

 

Before you do a loan modification, make sure you speak with a credit specialist in order to understand the likely consequences of the loan modification.