I get a lot of questions asking about what is loan modification. I want to take just a few minutes to informally explain what loan modification is and why you should take advantage of it instead of foreclosure.

A Loan Modification is a permanent change in one or more of the terms of a your loan allowing the loan to be reinstated, and results in a payment the mortgagor can afford.

So what doesn't everyone do this? First, you have to be able to show that you situation is temporary. Perhaps you had a second home you couldn't sell, unemployed or otherwise had financial trouble. The loan modification allows you to get back on track. This won't help you though if you can't show that you can keep up on your payments. The bank will want to see that you can afford your mortgage going forward.