Partially modified payment agreement on your mortgage
Quite a few home owners whose mortgage is owned / served by CitiMortgage have received mortgage modification offers from the Citi. Mind you, all these people have their mortgages in good standing with no late payments whatsoever. CitiMortgage calls such unsolicited and completely free of charge offers a Partially Modified Payment Agreement. Basically, the Citi modifies your adjustable rate mortgage, converting it into a fixed term with the low interest rate, often at or even slightly below you current fixed 3/1 or 5/1 ARM rate. The only caveat is, your mortgage account will be reported to 3 credit bureaus with the following comment - "Partially Modified Payment Agreement".
From what I gathered, it will lower your credit score and quite a bit. I am not sure why Citi offers them. Possibly to prevent upcoming foreclosures or government pressure to modify later. May be CitMortgage wants to help you in advance. Vast majority of these modification offers has been noticed in the states hit hardest by the housing crisis, like California, Nevada, Arizona, Florida. There are many rumors. Some even suggest that the Citi can subsequently charge off old mortgages for accounting purposes, which I personally believe is incorrect. Others speculate that Citi is heavily betting on lower interest rates in a future. Then I found some suggestions that with all the bailout money received, it simply does not care if any money will be made by servicing / selling mortgages.
We can only speculate. The main point is, to take the deal or not to take. While majority seemingly says that you must reject this offer, you may want to take another look at your situation. If you have an adjustable mortgage rate and plan to stick around for more than 8 to 10 years, possibly longer because the area is good, the schools are fine and you can't refinance because the home values are hugely down, a totally free partially modified payment agreement with CitiMortgage is quite enticing. Take a look at your other outstanding loans, especially revolving ones. The credit card lenders often can and will penalize you with higher rates if your credit score and history get worse. They can lower revolving credit limit down to just a few hundred dollars over the balance. If you carry some substantial balances, you have to be careful. The same goes in case you will need to finance a major purchase or cosign for your children. The latter often is not a very good idea anyway.
Tue Feb 15, 2011 11:02AM | Copyright: www.bad-credit-advisor.com | More in Mortgage | Comments (0)
Recent Entries
- Capital One Secured Credit Card to Improve Credit Score - Review
- How to get approved for mortgage - loan approval help
- Spouse average FICO credit score is higher?
- Why average credit score?
- Getting mortgage after bankruptcy - go FHA
- Debt settlement and how it affects credit score
- Debt settlement with Citibank
- Can I settle with credit card company with no late payments?
- Credit card limit lowered, credit score goes down
- Gold price will rise in 2011
