This economy is definitely in a rough patch. But it doesn’t have to be the end of the road for homeowners currently facing unmanageable home loan mortgages due to loss of income, divorce, illness, ARMs out of sight or other difficulties. There is a way to get better terms on a mortgage if the borrower is savvy enough to deal with their lender.

The path thousands are pursuing is through loan modification firms. These are experts in law, financing and specifically mortgages, specialists who take on cases they know they can win.  Underpinning this is the fact that banks don’t want to own houses. They are most interested in keeping mortgage payments coming in. When they foreclose on a property, they lose because they then must maintain it, suffer its liabilities, and then sell it – likely, at a loss in this historically down market.

A homeowner could negotiate this themselves, but few non-specialists have the inside industry knowledge to pick the terms that will be satisfying to the bank. It’s about knowing that point between the costs of foreclosure and the possibility of keeping a profitable client. Loan modification specialists have the necessary information and calculations for doing this. They charge about a month’s mortgage payment and provide a 100% money back guaranty, so it’s basically a no-lose proposition for the homeowner  – a rough, rocky road made smooth for the duration of the trip for anyone who wants to keep owning their home.

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.

A common misperception in the mortgage bailout discussion in the US is how the government is the only route for solving the problem. Truly, for millions of homeowners the Obama administration’s initiatives in this area will be effective at helping homeowners recast their mortgage in terms they can afford.

But for the homeowner who fears the help cannot come soon enough, perhaps because she or he is in a foreclosure proceeding already, a private route may be just as effective. Thousands of homeowners have already recast the terms of their mortgages through the help of a loan modification company. These are firms made up of attorneys and mortgage specialists who understand when and why a bank would agree to adjusted monthly payments favorable to the homeowner.

At its core, this is because mortgage lenders do not want to own houses and condominiums. That is not their core business, and they lose money on it most often. So if the borrower can find terms that allow the bank to make some money, even if less than before, they are more inclined to changing the terms of the mortgage.

The borrower might be able to negotiate this on their own. But with less knowledge and familiarity with banking terms, often the homeowner fails or is less successful. The loan modification firm typically charges a month’s mortgage payment – with a 100 percent money back guaranty – to find the best possible terms for the borrower. Better firms can project with more than 90 percent certainty whether or not they will be successful, even before they approach a bank. The process is that cut-and-dried.

Just like on “Who Wants to be a Millionaire?”, life sometimes has its lifelines. If you’re in a home loan foreclosure situation – already in process, or close to it – a home loan modification consultant is your lifeline.

Here’s how it works. If you are unable to keep up with your mortgage payments – due to the economy, illness, divorce or other reasons – your lender might be open to reducing your monthly payments by reducing your interest payments, the length of the loan, or by other means. A recast mortgage can mean the difference between keeping and losing your home.

There are several reasons you would hire an intermediary. One is that getting through to the right people at your bank may be a frustrating experience. This makes a little more sense when you realize that the average loan officer has a caseload of 700 homeowner mortgages. They are stressed too. Also, the loan modification specialist has industry knowledge of what a foreclosure would cost a bank.  Keep in mind banks don’t want to own homes — they are far better off with monthly payments and not managing real property, selling at a below-value amount and liability issues. So the loan modifier is essentially finding that point between where the bank loses money and where you can afford to be. Also, a loan modification firm is made up of home mortgage experts and lawyers who can deal without the emotion typically attached to a foreclosure situation. Minus the emotional factor, a rational solution is more likely.

Maybe your home is or is not worth a million dollars. If you can hold on to it, with a monthly payment that you can manage, you will probably get greater value from it in the future.

We see a lot in the news about banks working out their own problems while homeowners themselves are stressed by the housing market and mortgage crisis. Foreclosures by lenders on homes almost conjures up images from the 1930s, when the evil banker took away homes and farms with an almost gleeful demeanor.

But when it comes down to it, the banks don’t want to own homes. Nor do they want to go through the foreclosure process.  Why? It’s about the money. They lose in both the legal proceedings of foreclosure and the process of taking possession of a home, managing it and trying to resell it in this very low point of the market.

That’s why loan modification specialists are smart for anyone in a distressed loan or undergoing home loan foreclosure proceedings. To the homeowner, it’s about the place where they live, the emotional attachments and all-important place to sleep at night. A loan modifier – usually staffed by attorneys and mortgage financing experts – knows the financial position of the bank. They know where the lender’s hot spots are, and what lower, recast mortgage terms they might agree to because they’ll save money in the end. Note also that by allowing a homeowner to continue making lower mortgage payments, the lender ultimately keeps a customer for the long term.

Like the line from Cuba Gooding in the modern movie classic Jerry McGuire, it’s all about “show me the money!”  That’s what banks want, what loan modification specialists do – and what benefits the homeowner in the end.

Does it make sense for you to deal with the legal and financial complexities of your troubled mortgage by yourself?

Probably not. In fact, the root of many of the nation’s mortgage woes are because millions of borrowers either didn’t read the fine print or know what the words in the fine print meant. Huge monthly payment increases came as a surprise to many of them, as did the downturn in the market that puts their home “underwater,” worth less than what they are obligated to pay.

Loan modification programs are the answer. A loan modification firm is staffed by attorneys, accountants, and financial experts who understand not only the meanings of the terms, but also the financial position of the mortgage lender. Loan modification experts know that a bank loses in a foreclosure – the bank does not usually gain (particularly in a market such as we have now) by owning properties. The bank also spends money on the foreclosure process itself, therefore, the bank would rather not proceed with foreclosure.

A good loan modification firm can look at your case and determine if you can beat the system, so to speak. Your financial picture, the terms of your mortgage, and the condition of the lender are taken into account by the modification specialists, who then will give you a prognosis. If they think they can win – get you better mortgage payment terms, such as a lower monthly payment because of an overall lower interest rate – they will tell you they can with better than 90 percent certainty. And if the firm is any good, they will also offer a 100 percent money back guarantee.

There are situations where it pays to use a professional. For millions of homeowners, this is one of them. It can help them stop a home loan foreclosure dead in its tracks.

You as a homeowner are probably wondering if you should start the mortgage modification process now, or wait until tomorrow when President Obama releases the modification plan.

Put into perspective that there are millions of people (or more) out there that are wondering the same thing. You not acting fast could result in a wait that is getting longer by the day. It’s almost a given that once those details are released, mortgage lenders will be swamped with calls.

In this time of crisis, refinancing is no longer an option for many people and mortgage modifications are the way to go. I realize the loan modification process can be confusing and hard to understand since there are many steps to getting your loan approved. But don’t let this discourage you. if you think you may need a modification, chances are you do. Take action today; do your research, get on the internet, call around and ask questions and get your application submitted as soon as possible. Once Obama’s plan is released tomorrow, lines will grow increasingly longer causing the homeowner to become even more anxious.

Take this like going to an amusement park. You want to get there early enough so you don’t have to wait in line for all of your favorite rides. It’s that simple - get in line as early as you can to beat the crowd. Some lenders are estimating this month that modification could take up to 4 months to be completed. Others are guessing 6-8 weeks. If you are worried (that) you wont (won’t) qualify then there is only one way to find out; call, call, call.. Don’t be mistaken, waiting could mean months of time you may not have.

Just keep in mind, lenders are trying a great deal to get their client’s interest rates lowered and have their payments reduced. Not all that inquire will qualify, which could make you move up in the line. Tune in tomorrow for the details on Obama’s highly anticipated plan. Many questions will be answered but take note this is not a miracle maker. It is simply a step in fixing the housing crisis in this country. Tomorrow could mean however, a defining moment in the housing market crisis.

A professional approach often means hiring professionals to do the work for you.

At a time when a homeowner is in pre-foreclosure or just worried that foreclosure will hit them in a few months, it may seem impossible to hire someone to help you out of this situation. But loan modification firms are structured to help people in the greatest need, those who are struggling to stop foreclosure on their homes.

These individuals need a rescue. But for foreclosure prevention to take place, the homeowner needs to have some income and still be able to prove their current mortgage terms are untenable. Loan modification firms can examine the individuals’ cases and figure out how to present it to the lender in a convincing way.

There’s no deception in this process. It’s purely a matter of knowing what circumstances trigger a bank’s interest. Most banks lose in foreclosures, so they are open to hearing the case. It just helps with the negotiator knows their language, has all the right documentation ready, and communicates without the emotions that homeowners tend to have around the wrenching dilemma of foreclosure.

Change is not a word most distressed homeowners want to think about. For anyone with an ARM that has taken monthly house payments higher than they can afford, change is bad. Change in employment status, or household earnings that have fallen overall, is not good either.

But if a homeowner can recast their mortgage – bringing the monthly payment to an affordable level – change is a very, very good thing. But is it possible, given the amount of press on the millions of Americans in danger of foreclosure due to adverse circumstantial changes?

Absolutely, change to more affordable mortgage terms is possible. But most people don’t have the savvy to negotiate with their banks. Instead, the smartest thing they can do is to work with a loan modification firm, a team of lawyers, accountants and other home lending experts who works on behalf of the homeowner. The mortgage modification specialists understand bank language, document needs and just how to show a bank that foreclosure is not in the bank’s best interests, either.

Change comes at a price, but it’s exceptionally reasonable and easy to justify. Loan modification companies charge about a month’s mortgage payment. But they can do it with a high degree of certainty – more than 93 percent of loan mod attempts succeed. And for the few that fail, the modification firm should refund the fee (ask about a guaranty upfront).

Foreclosure is the dirty word of 2009. With millions of Americans facing hardship from loss of employment, or an ARM that took monthly payments beyond reach of their income, or both, foreclosure and pre-foreclosure are common concerns on virtually every residential street in America.

What’s become plainly evident in this era is that the legal and financial language of mortgages and home ownership overall is beyond the comprehension of a majority of hard-working people. This includes those with college educations, even graduate level degrees. And it’s the reason why bringing in a third party to negotiate with a lender makes a boatload of sense.

Loan modification firms are specialists in real estate and finance law. They know how banks work, and what will convince a lender to change the terms of the loan. They are able to show the lender that a foreclosure is not in the bank’s best interest in many situations. When they do, they succeed in recasting the terms of the mortgage, effectively enabling homeowners to stay in their homes at lower monthly and life-of-the-loan costs.

Reputable loan modification specialists generally charge the equivalent of one monthly mortgage payment to work on a homeowner’s behalf. Because they can look at the objective details of a case before going to work, they should be able to project with high certainty whether or not they will be successful. And the most respected firms offer a 100% guaranty cash-back if they are not successful.