Victor Stern thought his money troubles were over when he got approval to modify his home loan. Then his credit score dropped 121 points.

Stern, a business development director at an information technology company in Charlotte, North Carolina, said he was shocked to see his credit score drop to 619 from 740 after entering the trial period for a loan adjustment under President Barack Obama’s Home Affordable Modification Program. A salary reduction caused him to seek a change in the terms of his loan before he missed any payments.

Banks, including Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp., report the loan modifications to credit bureaus. The adjustments can lower credit scores because of the way the FICO formula, the most widely used by U.S. lenders, works. (Read more at: Bloomberg.com)

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{Photography by Woodley Wonder Works}