As many New Jersey homeowners continue to struggle to keep their homes, some are hanging their hopes on a loan modification. However, qualifying for this type of mortgage debt relief could actually make a homeowner's financial situation worse. This is because many loan modifications are not offered to borrowers until the situation is dire.
In many cases, lenders require a homeowner to be behind in their payments by at least 90 days before a loan modification will even be considered. This means that the individual's credit score will dramatically fall, which would most likely effect his or her ability to obtain credit in the future. It has been estimated that a mortgage loan that is 90 days past due reduces a person's credit score by as much as 100 points.