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1) What is a loan modification?
A loan modification is a process where the original terms of a mortgage are modified, giving the homeowner new payment terms that they can handle. It will usually involve a lower interest rate, extension of the term, adding missed payments to the end of the loan, reduction in principle, or a combination of these.

2) How is loan modification different from refinance?
In the current credit environment refinancing is extremely difficult and time-consuming. Typically homeowner must prove that they have excellent credit, job security, and disposable income after the bills are paid, and that they are capable of paying a large mortgage. Wall Street is no longer purchasing loans from banks; therefore lenders have to cut programs for less qualified borrowers. Homeowners that have fallen behind on their mortgage, or who owe more than their house is worth face an even more difficult time trying to refinance. Quite simply, a loan modification may be the only option for a great number of homeowners, particularly in this type of credit market.

3) How do you qualify for a loan modification?
Homeowners with adjustable rate mortgage and loan with high interest rate have higher chance of qualifying. Another important element is that you need to be experiencing some kind of hardship. You will need to present the lender with the reason as to why you can’t afford your current payment, but also explain that you can afford a new payment plan if one were granted.

4) Why will a bank modify my loan?
A bank must believe that it will be in their best interest, as it does leave them with a loss of thousands of dollars. In general they need to know that the homeowner will be able to make payments if the terms are re-negotiated. With the current state of the housing market, the lender could face a loss closer to the millions if they are unable to work out a loan modification. When a borrower is no longer able to make their payments the loan becomes what is called a nonperforming asset, as the loan is no longer bringing money to the bank. Turning the non-performing asset into a performing asset is a matter of income; if a loan modification is possible a bank wants to be certain that following the modification the loan will remain a performing asset.

5) Why should you work with a professional?
While it is possible for a homeowner to perform all the steps required in modifying a loan, it is highly recommended that you work with a qualified professional. In short, loan modification is a very complicated process where all the required steps must be taken strictly as stipulated. Working with a qualified professional will solve all the headaches associated with loan modification.

6) Is this a government website?
No, this is not a government website. We work with professional loan modification and foreclosure prevention experts that may be able to help you avoid foreclosure.

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The information and notices contained on this website are intended as general research and information and are expressly not intended, and should not be regarded, as financial or legal advice. We attempt to ensure that the material contained on the web-site is accurate and complete at the date first published, however you should recognize that information contained on this web-site may become out of date over time. Readers who have particular questions real estate financing or foreclosure, or who believe they require legal counsel, should seek the advice of an attorney. By submitting this contact request, you are consenting to be contacted by foreclosure consultants by telephone or email, even if you have previously listed yourself on any state or federal Do-Not-Call List. Please note that Wisdom may receive compensation from the foreclosure consultants for that introduction.

IMPORTANT NOTICE: is not a mortgage assistance relief service or mortgage lender, and does not do refinances. is not a government sponsored website. matches consumers with companies that may offer foreclosure prevention services. Lenders may not agree to change a consumer's loan. To access information on government sponsored assistance, please visit

* The 2% interest rate is based on the lowest interest rate available via the government's HAMP program. To learn more, please visit