For the most part, banks do not want to own your home, or to kick you out of it by way of a sheriff’s sale.  I know that may be hard to believe based on the way many banks treat customers who fall behind on the payments.

The truth is that there has never been a better time to be in the driver’s seat when it comes to negotiating with a bank.  Many banks are desperate to turn non-performing loans into paying assets again.  It may be possible to stretch out the term in which to pay back the loan, or to lower the interest rate on the loan.  You can forget about the bank reducing the amount of principal you owe on the loan.  Despite the claims of some loan modification companies, it just does not happen.

A loan modification is not for everyone.  For many people, they are a bad deal.  Many people owe more on the house than it is worth.  A loan modification merely delays the inevitable conclusion – that the house needs to go back to the bank, and that the homeowner should walk away from a lifetime money pit.

For others, a loan modification is a smart choice.  A loan modification may allow the borrower enough time to get the children through school, or to get back on his or her feet. Having an attorney who can explain the pluses and minuses in your particular situation is the best way to go.