A permanent change to your mortgage terms that brings the loan current and gives you a payment you can actually afford.
According to HUD, a loan modification is a permanent change to one or more terms of the mortgage loan. It reinstates the loan to a "current" status and results in a monthly payment the borrower can afford.
A loan modification is not the same as debt consolidation, refinancing, or forbearance. It's a long-term solution for rising interest rates or other hardships that threaten a household budget.
In most cases, a homeowner who genuinely needs help will qualify for some form of loan modification. Talk to a licensed attorney or HUD-approved housing counselor about your specific situation.
Past-due principal, interest, escrow, late fees, and costs can be rolled into the new balance — spread over time, not lost.
Lower payments ensure repayment, and the extended term means more interest earned over time.
Foreclosing means selling at a fraction of value in a slow market — plus the cost of the legal process itself.
Modified loans show fewer defaults on the lender's books — better for investors and regulators.
There isn't just one option. Depending on your situation, the lender may offer any of the following:
Your delinquent payments are distributed over a period of time — usually no more than 10 months. A portion of the deferred amount is added to your monthly mortgage payment. This brings your account current on a fixed timeline.
A permanent change to one or more terms of your mortgage. Past due interest and escrow are added to your new unpaid principal balance and re-amortized over the remaining life of the loan. Once executed, your account is current immediately. This changes the note itself — giving you a real fresh start.
A second mortgage, interest-free, paid off when the homeowner's loan is paid off. This option allows up to 12 months of past-due mortgage payments to be included in the second mortgage. Available only on FHA loans. It brings the account current immediately.
Allows you to sell your home and use the proceeds to pay off the mortgage — even if the home's market value is less than what you owe. It avoids the lengthy legal process of foreclosure. Best for homeowners who cannot afford to keep the home long-term.
Various federal programs exist to help homeowners avoid foreclosure. Programs come and go — check with your lender or a HUD-approved housing counselor for what's currently available. Some programs require 3- or 4-month trial modification payments before the modification is finalized.
A loan modification is a paperwork-heavy process. Here's the general flow — though specifics vary by lender and program.
You tell us about your situation. We help determine whether loan modification is even the right direction, or whether another option (like bankruptcy) may fit better.
You sign a form authorizing us to communicate with your lender on your behalf. This is required for any third party to discuss your loan with the lender.
You complete a detailed financial worksheet covering your current and past income, expenses, and hardship. We help you organize and format it properly.
We prepare the loan modification package and submit it to your lender. Then we follow up on your behalf while it's under review.
The process generally takes 60 to 120 days. Once approved, your lender sends the new loan documents for you to review and sign.
We are a document preparation service. We do not provide legal advice, negotiate legal claims, or represent you before any court or lender.
What we can do:
If you need legal advice about foreclosure, mortgage fraud, or predatory lending, consult a licensed attorney. HUD-approved housing counselors also offer free assistance — find one at HUD.gov.
Call us. We'll help you understand your options.