September 24th, 2008 by Reed Allmand 
A Loan Modification is a permanent change in one or more of the terms of a homeowner’s loan. It allows the loan to be reinstated, and results in a payment the homeowner can afford.
The homeowner must reach an agreement with the lender to modify the loan. Generally the lender will be a little reluctant to agree for a loan modification as modification typically results in less interest.
The lender will accept a percentage of the payments that the homeowner is behind as a down payment (generally 50%), then take the difference and either apply the difference over the total number of payments left on the mortgage or add a few months extra payments.
Common loan modifications include:
- Adding missed payments to the existing loan balance
- Making an adjustable-rate mortgage into a fixed-rate mortgage
- Extending the number of years homeowner has to repay
A loan modification program allows the homeowner to change the terms of the existing loan to any other product the lender offers. The lender does not require new title work, new appraisal, or new credit documents. The loan modification process is simple, fast, and easy. With loan modification, the homeowner can save significant time and costs involved with a traditional mortgage refinancing. Additionally, since the terms of the loan are merely modified and a new loan isn’t created like in a refinance, the loan still has the same maturity date.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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