When a bank starts sending notices to homeowners that their property is in foreclosure proceedings, it’s not the end of the story. As one single mother, a homeowner, told a financial news show recently, “I thought it was time to give up, that the horses were out of the barn.”

Fact is, those notices are to be taken seriously. But it’s not like there aren’t options available to them. The government bailout plans are being worked out, but the answer now for millions is in a loan modification program. This is when a mortgage, say an ARM, is recast into a better mortgage package. Instead of paying 10 percent interest, the rate might be lowered to seven or six percent or lower.

Why would a bank agree to such terms? They don’t really want to go into foreclosure. They would rather keep you as a customer, paying a profitable amount to them for years into the future. They want YOU to take care of your house, not THEM. It’s expensive for them to go through the process.

But most people don’t know how to get modified loan terms on their own. They are perplexed by banking terminology, and lack industry knowledge on what to negotiate. 

Enter the loan modification specialists. These are lawyers and accountants who know their industry. They can see where a lower interest rate charged to you still is profitable to the lender.

Check loan modification firms for fair fees (about one month’s mortgage payment), success rate with past cases 90+%) and ask for a money back guaranty (the good ones offer it). They can be a lifeline to the distressed homeowner — and they can save before all the horses have left the barn.

Many homeowners in or near foreclosure proceedings are unaware that the terms of their mortgage can be changed, even at a late stage. A bank/mortgage company will do this if they see a lender is able to make payments if the monthly payments are lowered.

Why would a bank do this? This is simple: a bank does not do well owning a house, particularly in this housing market. They are stuck with property maintenance, liability and the process of selling it again. This is not what banks do, and often they lose money in such situations. 

The question is where does a lower monthly payment and other mortgage terms, for example going with a fixed rate in place of an ARM, still beat the lower revenue the bank will get from a recast mortgage? An average homeowner is not usually able to figure this number out on their own. But when a professional mortgage loan modification firm is engaged, they are able to use their experience and industry information to come up with a number that is beneficial to all parties. It’s truly a win-win solution.

The better loan modification firms charge approximately one month’s mortgage payment on a property as their fee for service. And those experienced firms will know with a high degree of certainty – 90 percent, usually – in advance whether they will succeed at renegotiating the mortgage terms to a successful outcome. If not, the homeowner should be provided a 100 percent money back guaranty, thus making it a no-lose proposition for that individual.