A loan modification is a mortgage relief option for borrowers facing financial hardship, changing the rate or term to make payments more affordable. Proof of hardship is required for approval. Lenders prefer modifications over foreclosure. Specific criteria must be met, and a trial period may be required before final approval.

Modification options include interest rate cuts, repayment period extensions, principal reductions, and fixed-rate conversions. While modifications can provide short-term savings, they may increase interest paid over time. Different loan types have specific modification programs, such as Flex Modification for conventional loans and extensions for FHA, VA, and USDA loans.

Applying for a modification involves reviewing circumstances, organizing financial hardship documentation, contacting the servicer, and carefully reviewing the terms. Monitoring new payments is essential. Alternatives to modifications include forbearance, refinance, short sale, or deed in lieu of foreclosure. Scams exist, so be cautious of promises to prevent foreclosure and always verify information.

Read more at Yahoo Finance: What is a mortgage loan modification, and how do you get one?