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When a borrower has fallen behind on his or her mortgage payments, it may be difficult or impossible to see a way out. Fortunately, there is actually a way for a homeowner to negotiate with a lender to seek a modified mortgage agreement that will result in a payment that the homeowner can actually afford. A loan modification is a permanent change in one or more of the terms of a mortgage loan. The loan is reinstated with these changes in effect, typically resulting in a lower payment.

The best way to approach a loan modification is with the assistance of an attorney. A foreclosure defense lawyer will not only know who to contact at your lender’s office but will also know how to conduct negotiations to seek a modification that is in your best interests. While some lenders may try to take advantage of homeowners who do not have an attorney to handle their case, with a competent legal professional you can rest assured that your rights will be well protected.

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What is a loan modification?

This process involves negotiating with a lender to alter the terms of a mortgage loan.

This may include:

  • Extending the length of the loan
  • Adding past due payments into the overall loan amount
  • Reducing a mortgage rate

These changes allow a homeowner to pay his or her mortgage every month and therefore avoid defaulting on the loan and facing foreclosure.

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With foreclosure looming on the horizon, it may seem that there are no options to save your home. However, lenders as well as borrowers may find loan modification advantageous. Foreclosure is an expensive process for a lender to carry out. The lender may stand to save money by helping a homeowner remain in the home and avoid a short sale (where the lender would accept less than the value of the property) or deed in lieu (where the lender would accept the property back and "forgive" the balance owed by the borrower).

Make sure you have a legal professional who will be able to accurately present your case to the lender in order to seek a modification that will benefit you now and in the long run.