Banks are more willing to negotiate with homeowners on mortgage terms than most people realize.

This is because a bank will lose about $50,000 in a home loan foreclosure. These costs are from staff time involved, lost income in the foreclosure and resale process, management of a foreclosed-upon property, and the ultimate sale of a property for less than the original loan due to the poor market. Banks do not want to foreclose upon properties — it’s a lose-lose scenario.

They are willing to negotiate, but most bank loan officers are overworked, with about 700 cases to manage. They are far more inclined to deal with professionals, in this case loan modification specialists. Loan modifiers are lawyers and finance people who know the industry, understand how to speak the lender’s language and what numbers (recast mortgage terms) are going to be tolerable on the bank’s balance sheets.

What does the homeowner have to do? The homeowner shares financial data with the loan modifiers, at which point the loan modifiers can say whether or not the loan modification will be successful (with about 90 percent confidence). The borrower then pays a one-time fee, about a month’s mortgage payment, which should be refunded by the firm if they fail to find a manageable new mortgage.

This is an untold win-win in the economy and banking system. More people should pursue it to their advantage.