A tradeline shows 'Current' status but has a notation of '120 days past due as of [date 6 months ago].' What does this pattern most likely indicate?
Correct Answer
C) The account was likely included in a loan modification or workout agreement
When an account shows current status after being significantly past due, it often indicates a loan modification, forbearance agreement, or other workout arrangement was implemented. The borrower may need to provide documentation of the modification terms for underwriting review.
Why This Is the Correct Answer
When an account shows current status after being significantly past due, it often indicates a loan modification, forbearance agreement, or other workout arrangement was implemented. The borrower may need to provide documentation of the modification terms for underwriting review.
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