A fact that is not reported very much is how banks stand to lose an average of $50,000 on every property they foreclose upon. In other words, banks have incentive to not foreclose on property, even if it means changing the terms of the mortgage in favor of the homeowner.

In fact, millions of people with distressed mortgages from accelerated ARMs, income loss or other difficulties are having their mortgage recast in their favor. It’s largely a matter of talking to their lender, explaining their circumstances and hitting a number that is easier for the borrower and still profitable for the bank.

Of course, this is not an easy negotiation for anyone who lacks facility with legalese or the mathematics of banks. This is why thousands already have hired a loan modification firm (lawyers, accountants, mortgage industry specialists) to handle this negotiation for them. The loan modifiers look at the facts of the case, at which point they can predict with a high degree (90 percent or higher) of confidence as to what the outcome will be. Homeowners pay an upfront fee equivalent to one month’s mortgage payment, more or less, which is refunded to them if the loan modifiers are unsuccessful in that effort.

Home loan modifications are also an underreported factor in the current housing crisis. Even homes in foreclosure proceedings can halt that process with a loan modification.