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Do borrowers taking part in the Obama administration’s mortgage modification program deserve a black mark on their credit records?
Lenders use special codes to let credit bureaus know what customers are borrowing and whether they’re paying on time. When the loan modification program, which lowers mortgage payments for homeowners who are behind in their payments or in danger of imminent default, was announced in February, lenders used an existing code, called “AC,” to signal that borrowers were participating in the program.
The problem for those borrowers, however, was the fact that the AC code signals that a consumer has made only a partial payment.
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