A loan modification is not as bad from a credit standpoint as foreclosure. Most reputable Lenders will discuss modifications with their borrowers or their agents if there is reason to believe that it will save the house and the account. You may have spoken to the wrong person. If you have equity available and you are facing financial hardship it makes sense to try a workout plan with the Lender's workout department. Engage an attorney specialising in residential modifications and do not pay a fee upfront. If you are foreclosed it will be at least 3 years before you can qualify again for a mortgage providing your credit has been perfect since the foreclosure. Foreclosure is not a good option if you can avoid it.

It depends if you have equity in the home. If you do, you should sell. If you dont, but you want to stay at the home I would talk to a bankruptcy attorney and have them talk to you about your options. Now that you are late on your mortgage your credit scores will drop fast. Once you have been late for 4 months in a row it will look like a foreclosure. I hope this helps. Any other questions let me know,Kyle Stancato

Loan modification is a good option if you want to keep the house and it only affect your credit based on you late mortgage payments. If loan modification does not work for your situation then consider a Short sale or Deed in Lieu. Foreclosure is the last option when everything else fails. With short sale, your credit will not get hit as much as a foreclosure on the record and with a short sale you can buy a house again sooner in 2-3 years vs 5-7 years with a foreclosure. If you are in Merced county, CA, I can help you with a short sale. Good luck. Karolyn 209-617-3718.

Hi Debbie,Because they technically do not report as a modification but that you may be late on your payment, it is not as damaging as a foreclosure. If your intent is to stay in the house, you should make an attempt to get it modified. If you choose to let the house go, you shoudl at least try the short sale route. As a real estate and mortgage broker here in California, I would be happy to answer any other detailed questions you may have. Feel free to call me at 888-PierWest(743-7937) X 701 or email me at Matt@pierwestcapital.comBest,Matt Davis