A loan Modification is when a bank lowers the lenders monthly payments to make them more affordable for the lender.

Why would a bank do this? Well its a win win for both parties.

The alternatives (foreclosure, bankruptcy) is a bad option for both to you and your lender. Your credit will suffer, and there’s a financial cost to the bank.

Often Loan Modification is a good option.

In early 2008 my husband and I began to see a substantial drop in our income and realized very quickly that we were in financial trouble. This dying economy hit our wallets hard. My husband who is in the sales industry and observed as his income began to go down as less potential customers came in the door. And I was forced to close down my home business and get a "job". Over the next year even though we were both working our butts off, we saw our income drop by $1500.00 a month.

We were in serious trouble. We fell behind on our mortgage. This was very frustrating and humiliating for us, because prior we had never been late. We would actually even pay the mortgage a few weeks a head. This was very scary for us as we saw or savings disappear.

Our bank suggested we do a short sale or simply sell since our mortgage was now more then we could afford. But this was our dream house and we knew that we would be upside down anyway since the real estate market was so bad.

That is when we started researching our options and discovered Loan Modification.

Through loan modification we were able to get our payment lowered by $800.00 a month. This was a huge help for us. We have been able to catch are breath and now we see the light at the end of the tunnel.