Three conditions must usually be present for a loan modification to be viable:

1.       There has been a financial HARDSHIP (such as a loss of income or an unexpected increase in monthly expenses)that has resulted in the inability of the homeowner to make the current mortgage payment or the increased payment that results in an adjustable interest rate mortgage.  

2.       There is not enough equity remaining to sell the home or refinance the current  mortgage without the lender agreeing to take less than is owed. 

3.       The homeowner must be able to provide documentation showing that they can afford to make the proposed modified payment. Because this is NOT a refinance, but rather a negotiation between the homeowner (or their representative) and the lender, there are no published guidelines. All income can be considered as long as it can be documented. Common sense prevails in evaluating proposed loan modifications... remember, the lender does NOT want to take back the home.For homeowners who can no longer make their current mortgage payment but who CAN make a lower payment, a loan modification can save their home. For lenders with non-performing loans, loan modifications can be the fastest and least cost solution to working out that loan. And for the rest of us, each loan that is modified is one more house that is not added back into the inventory overhand, and therefore it puts us one house closer to the end of this crisis. 

• You Are Facing Foreclosure
• You Are Upsidedown
• Your Rate is Adjusting
• Your Rate Has Adjusted
• You Are Behind on Payments
• You Can't Afford Your Payment
• You Recognize You Will Face a Financial Hardship Soon

Below are a couple of examples of people who qualify for a loan modification:

• My loan payment has started adjusting and I am falling behind on payments.
• My loan is an adjustable and I won't be able to afford the new payment.
• I have experienced a hardship that reduced my income and has affected my ability to pay my mortgage.
• I dont qualify for a refinance because my house isn't worth enough.
• I was lied to about the terms of my loan.
• I fell behind on my payments due to medical problems.