Important: The content below is not professional advice, including legal, financial or advice as a foreclosure consultant. Please review the federal homeowners help website for the latest program information. http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure.

What is a Loan or Mortgage Modification?
Loan Modifications are changes to your loan agreement. Your payments get more affordable, and you don’t have to default on your loan. Banks choose to offer loan modification programs because it is easier to work with you than to go after you.

Why do Banks Offer Loan Modification?

If you stop making payments, the bank has several options.

Attempt to repossess property; a home foreclosure, for example
Attempt to collect through wage garnishment or a bank levy.
Give up hope and accept the loss
Watch you declare bankruptcy and receive little or nothing

None of these options are attractive to you or the bank. Your credit will suffer, and there’s a financial cost to the bank.

Is there another option? Yes - banks offer a loan modification so that they don’t have to do any of the above. Loan modification can be less expensive and more profitable for banks, but not in every case.

How do I Get a Loan Modification?

To get a loan modification you generally have to ask for one directly with your bank. Call the bank and let them know about your financial situation. Just be honest and explain whether or not you’ll be able to make your payments. If they agree, you may qualify for a loan modification.

Banks have different criteria, so there is no way to know ahead of time if you’ll qualify for loan modification, asking them is the best path to take.

What Types of Loan Modifications Exist?

Banks can change the terms of your loan to make the payments more affordable. These changes may be permanent or temporary. In any case, the result is a more manageable payment.

With lower monthly payments, you could end up paying more in interest over the years. If loan modification keeps you afloat, it may be worth the cost. However, make sure you know what it'll cost you and that it's your best option - not just a way to free up cash each month.

Tips for Talking with your bank about Modifying your mortgage

You should be well prepared in advance of contacting your lender and requesting a mortgage modification. The bank will want evidence that you cannot make payments so collect the folling information to aid in the discovery process.

Your monthly income, and detail of where it comes from
Monthly expenses, broken down by category (mortgage, food, transportation, etc)
Paystubs
Bank statements
Loan statements and agreements

If you present a snapshot of your financial situation, the bank can make a decision on your mortgage modification more easily.

How Long Does it Take?

You should expect to spend several hours of your time requesting a mortgage modification. You’ll wait on hold when you call, you’ll have to present your case, and you’ll have to hunt down documents and forward them to the bank. This is no small task.

After you request a mortgage modification, you should expect to wait several weeks before the bank actually does anything. During that time, do what the bank tells you - for example, they might say that you have to continue making payments to qualify for the mortgage modification.

If you do not qualify for a Government based homeowner's foreclosure relief program and you would like a free and confidential consultation on your options. You can request a free consultation by providing details on your situation below and a home foreclosure prevention expert will contact you and answer all your questions.

Please provide the details of your situation so a foreclosure expert can quickly review your case and provide you with realistic options to save your home today.

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Your Expenses and Income		About your home and mortgage
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