Understanding mortgage loan modifications

For homeowners struggling to make their mortgage payments, a mortgage loan modification could be a way to stave off foreclosure.

With a mortgage loan modification, the lender makes a permanent change to the original mortgage agreement so the homeowner can continue making monthly payments. There are several different ways a mortgage can be modified.

The federal Home Affordable Modification Program is now in place to help beleaguered homeowners. There are guidelines as to who can qualify for the program and it allows the lender to refinance the mortgage at a lower interest rate, thereby lowering the monthly mortgage payment.