The Mortgage Loan Modification process is a negotiation between the homeowner and the lender to adjust the terms of the loan, such as the payment duration, monthly payment amount, interest rate, etc. The main goal of the modification is to help homeowners to avoid foreclosure, during a challenging period of going through job loss, divorce, illness, or financial hardship. Homeowners who fall into any or all of the following three categories can apply for a home mortgage modification:

Homeowners who have fallen behind on their mortgage payments or anticipating the same

The home value has dropped below what the homeowner owes on it

Homeowners that have an adjustable rate mortgage that has increased or soon will increase

The process involved in obtaining the mortgage modification consists of the following steps:

Evaluate if the loan modification is the right option for you

Collect financial documents required to substantiate the hardship

Draft the hardship letter

Contact the lender and negotiate the terms

Sign the modification agreement

The pros of going through mortgage modification as compared to going through foreclosure are:

It helps homeowners avoid losing their home by way of foreclosure or Bankruptcy

Banks do encourage loan modifications and thus best terms can be obtained

It helps ease the financial hardship the homeowner is going through

Possible upward trend in real estate prices can fetch the homeowner a good return on investment in the long run

Mortgage modifications can help you rise from temporary hardships without losing your home but you need to be aware of the scams going around with respect to the promise of obtaining loan modifications. Check out the credibility of the modification specialist before hiring him or her for the consultation in this process. Also, make sure to evaluate the fees associated with the loan modification process. You can do them for free by yourself, but consulting with a specialist is highly recommended for effectively obtaining the modification.