In the U.S. many people are facing unemployment problems, cost of living has increased and people are losing their homes everyday. Both individuals and families are getting into a debt trap. People want to keep their homes, but they do not know their rights and they are not aware about many programs and options available to them. One option is loan modification. It is a way to save your home and finances.

Loan modification is a perfect solution for homeowners who cannot pay a monthly mortgage amount on time. Borrowers can speak with the lender about his problem and modify the terms of the loan and give a second chance to make monthly mortgage payment again.

Through loan modification a consumer can stop the foreclosure process. If you are not able to pay the monthly mortgage amount on time, call your lender and find out what programs they offer. In a loan modification process, certain permanent changes are made in original agreement between you and the bank. Changes that can be made in the agreement are interest rate, length of the mortgage, amount of monthly payments and principal amount.

Factors you need to consider for mortgage loan modification: You are not able to make monthly mortgage payments, defaulted for consecutive 3 months, mortgaged property is your main residence, suffered financial hardship due to unexpected medical expenses, sudden job loss etc.

Loan packages are available for all homeowners going through financial hardship under the Home Affordable Modification program, which essentially grants any homeowner the right to apply for loan modification if they are unable to pay their mortgage. It can avoid foreclosure problem but getting approval from lender may be a long and difficult process. To get approval, housing and development department has appointed agents and representatives nationwide to give free consultations on loan modification and to negotiate terms between homeowners and their lenders.

Unfortunately there are modification scams, so homeowners need to conduct due diligence into the company they select to help them modify their mortgages. Warning signs of scams include a guarantee that the loan will be successfully modified. Other warning signs include phone calls from modification companies claiming to be working as an employee of your lender. To make sure that you're working with an ethical and experienced company check transparency of the company. Does the company have a professional website? Can testimonials from clients be provided? Confirming these items can allow you to feel comfortable that the company is qualified to assist you.

Today's loan modifications are finally within reach, though it can take lots of effort on the homeowner's part to finally get the relief they need. Many people are eligible for loan modification and every homeowner in danger of being foreclosed on should consider it to save their credit and their home.