how credit scores affected

Good question, and it’s certainly an important distinction. A refinance does not hurt your credit score, and a modification does for several years or longer. Modifications are basically defaults on the existing loans, and ordinarily are for folks who are deliquent and in danger of foreclosure, as opposed to refinances which are for borrowers who are current on their existing mortgage. Modifications certainly beats foreclosure, but they do have serious repercussions and borrowers should know that upfront.