Counseling

• Contact a HUD-certified foreclosure counselor immediately when seeking help with a mortgage modification. A foreclosure counselor can help you prepare a proposal to your lender inclusive of a hardship letter and documentation to support your claims of financial hardship. If modification is not your best option, a counselor can help you find alternatives that suit your needs such as financial assistance from local nonprofit agencies. For example, in the state of Georgia in 2010, the United Way offered $3,000 in mortgage assistance to home owners through its Fresh Start program.
  
  

Making Home Affordable

• In February 2009, the federal government devised a program called Making Home Affordable, which offers a range of mortgage assistance options for home owners. The program includes options for home owners to reduce their monthly mortgage payments on qualifying home loans. The two common forms of aid through Making Home Affordable are refinancing and loan modification. Both first and second mortgages can be modified through the Making Home Affordable program.
  
  

NACA

• The Neighborhood Assistance Corporation of America, NACA, offers assistance to home owners across the country seeking mortgage modification. NACA counselors meet with you to help you determine your monthly budget and how much you can afford to pay toward your mortgage. Then, the counselor negotiates with the lender on your behalf to create an affordable mortgage payment. Loan modification through NACA is permanent. If you do not have a source of income, NACA will not assist you in modifying your mortgage loan. Loan modification is reserved for home owners with consistent monthly income.
  
  

Considerations

• Modification can be a viable strategy for saving your home when you qualify. Loan modification often works by extending the life of your mortgage or adding the past due balance onto your principal to bring your loan current. When your file is under review for mortgage modification, lenders generally pause foreclosure activities. However, do not rely exclusively on mortgage modification to save your home. In the interim, begin preparing proposals for second and third mortgage assistance alternatives from your lender. Mortgage modification reviews take anywhere from two to six weeks to complete. Use your time wisely to find resources that will help you regain control of your monthly mortgage payments.