A way to keep your home.
Loan modifications may work for some struggling homeowners who want to try to keep their home. A loan modification works by negotiating new mortgage terms with your lender, with the aim of reducing monthly payments.
Exercise caution, and make sure you understand the long-term implications.
Lenders will almost never reduce the balance owing on the loan. Monthly payments are usually brought down by extending the term of the loan. This means that you end up paying tens of thousands of dollar more in interest in the long run.
Loan modifications do work for some homeowners.
Loan modifications have a high re-default rate, and they are more expensive to homeowners over time. Make sure that you understand the terms of your modification, and can meet them - and also that you have examined all other options, before agreeing to a loan-modification.