The scenario is typical in this economy and the housing meltdown: A homeowner experienced hardship and a mortgage rate increase that together put her behind in her payments by more than $10,000. Included in that are property taxes with stiff penalties for late payments. The homeowner has monthly income, but not enough to cover her regular payments, much less this back-due amount in arrears.

To stop foreclosure, the homeowner tries to contact her bank to find out options for working it out. Unfortunately, after several attempts at reaching a live person, the person she gets can’t tell her more than what she already knew, that her situation was a problem.

This homeowner is wise to engage a mortgage loan modification company to work the situation to her best advantage. For about the cost of one month’s mortgage, the loan modifiers will examine her case for foreclosure prevention opportunities. A reputable firm will not take a case unless it shows a high probability of succeeding, and if it fails in the end, they should pay the fee back with a money-back guaranty.

A loan modification outcome is always favorable to the borrower (but beneficial to the bank, which does not profit in managing and reselling properties at a loss). The borrower not only retains ownership of the house, but usually gets manageable monthly payments at a reduced interest rate locked in.