There are second chances, even in this economy.

And what may come as surprising to homeowners in distress, even those in “pre-foreclosure” when they are behind a month or two in their mortgages, is that banks don’t want to foreclose on them. Which makes sense when you think about it: a bank does not want to own a house or condominium. It’s not their core business. And this is a lousy time for them to try to sell anything.

This is why banks are willing to negotiate loan modifications. And while an individual can call a lender and ask about a home loan recast, quite often the homeowner doesn’t even know what can be achieved in such a process. It’s an emotional time for many, and they may get “lost in the sauce” so to speak in terminology.

Thousands of homes have been saved already, where the owner continues to hold title, living in that place they call home, due to loan modifications. For a large percentage of these homeowners, the work was actually done by a loan modification specialist, generally a firm of experts in real estate law, financing and lending. They charge a fee – expect to pay around $300, more or less – which may be less than a single month’s savings once the modification is complete. They should determine in advance if a case will succeed with a high degree of certainty, based on their past experience with major lenders.

Modifications therefore represent a win-win: banks keep borrowers as customers, customers keep their homes, and neighborhoods even gain with one less foreclosure bringing down property values.

In this economic crisis, everyone wants to find a recast button. “If only we had made better decisions back when…” is said or thought in corporate boardrooms and at kitchen tables alike.

In fact, homeowners in mortgage distress are discovering they can achieve a home loan modification, actually negotiating better terms on their mortgage – good enough they can save their homes. The facts are that banks don’t want to foreclose. They are not in the business of owning, maintaining and selling homes – and are unlikely to unload these unwanted properties at their preferred prices in an historically low market.

But a large percentage of homeowners are uncomfortable with the loan modification process. They may not know they exist, or what can reasonably happen. The terminology is likely unfamiliar, and they fear they will make mistakes similar to the loan terms they agreed to at purchase of their property that got them in trouble in the first place.

This is why loan modification consultants are on the rise. Thousands of people have retained ownership of their homes, or exited with better terms, because they were able to use “loan mod” specialists. Legitimate loan modification firms can work around borrowers’ bad credit, assessing hardship and presenting a business case to the bank that helps all parties with loss mitigation. Their services stop foreclosure even in process, in some instances. Quality consultants will also limit fees to around $300 or slightly more, depending on the location, and not take a case until they’ve examined the details enough to proceed with high confidence.

Banks can be reasonable, if approached professionally, dispassionately and with an understanding of what they’re up against on their side of the equation.

Adjustable rate mortgages, ARMs, started out as a good idea. They allowed people to get better initial terms on their mortgages, to get in the game of home ownership. The thinking was the rate may go up or down, but you could deal with that at three, five or ten years into the future.

Of course, everyone knows that a bad ARM is at the basis of the home foreclosure crisis hitting millions of homeowners today. What borrowers need to do is recast their mortgages, stop foreclosure, through a loan modification.

Which might sound too good to be true. But it is possible to renegotiate your loan terms with the bank, and here’s why: banks do NOT want to foreclose on your loan. The process alone costs them money, and what they end up with is the costly business of owning a property that may very well not sell. Banks want to avoid foreclosures, and they’re willing to negotiate.

Loan modification specialists generally help this process along for most borrowers. The bureaucracy of renegotiating terms with the bank is intimidating to many, and the fact that loan officers are handling a crushing case load are barriers for many distressed individuals in the early stages of foreclosure. By calling in a specialist – generally at a modest fee, less than $400 in most cases – the borrower can be confident the best terms were achieved.

ARMs don’t have to be a regretful choice any longer. Better terms are available for those who act in time.