If you are having difficulty paying your mortgage, you can request a mortgage modification or a "workout" agreement from the bank that services your mortgage. The goal is to reduce your monthly payment to an affordable amount. The process of negotiating a mortgage modification can be frustrating, and for this reason you should consider seeking the assistance of a federally approved housing counselor or a lawyer who will advocate on your behalf.
Banks often are willing to modify mortgages for qualified homeowners as an alternative to foreclosure. Government programs, such as the Making Home Affordable Program, also provide incentives for banks to modify mortgages. A mortgage modification is preferable to foreclosure because you keep your home. If you can achieve an affordable loan modification, it is usually the best option.
Here are the main kinds of workout agreements your bank may offer you:
Negotiating a mortgage modification requires persistence. Your bank may give you conflicting information or request that you submit the same paperwork multiple times. Different mortgage modification programs have different requirements. For example, some programs require the homeowner to document a financial hardship. You may be granted a temporary modification that will become permanent after a trial period. Stick with it and seek help from a federally approved housing counselor.
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