Late Payments During Mortgage Modification

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Dear Experian,

I have never been late with mortgage payments except for the last two months when I was working on a mortgage modification with my mortgage company. I was told not to pay my mortgage payments until a determination was made, yet my account shows I was two months late. Why?


Dear SKV,

Mortgage modification programs are intended to help people who can no longer afford their monthly mortgage payments keep their homes. As a result, the programs often require that your mortgage payments be delinquent before you can qualify. That means the late payments will appear in your credit report and, as result, will be very damaging to your credit scores.

However, the lender determines whether any late or missed payments during the mortgage modification qualification process are reported to the credit reporting agencies. Therefore, it is very important to understand the terms of the modification agreement and to consult with the lender as to how the account will be reported both during the modification process and after it has been completed.

Discuss the details of the modification program with the loan modification company and the mortgage lender. They should be able to explain the terms of the mortgage modification contract and how any missed payments will be reported.

Thanks for asking.
The "Ask Experian" team