Times are hard and many people need to refinance their homes because they are having problems keeping up with the payments and may even be facing foreclosure. Fortunately, now there is help available through a loan modification program. These programs are designed for borrowers who are already in default 30 days or more and for those who are not able to get refinanced because of a lowered house value or because they are self employed.

The economy is horrid, businesses are closing, jobs are in jeopardy, those who have jobs are finding their hours and pay cut. Then on top of all that the homes are not worth as much as they were when the mortgage was taken out.

Many homeowners owe more money on their home than it is actually worth. To make matters worse, a lot of these people can no longer afford their payments are forced to sell their homes below the appraised value just to get out from under the mortgage.

There are companies that can assist you through your loan modification. Loan modifications are typically too complicated for the average person to complete on their own, and information can be hard to find. A loan modification specialist can help you skip all the hassle and efficiently guide you through the process. It is possible to get a free consultation to see if a loan modification program would help your situation.

There is a catch to the loan modification program: simply that there can only be one modification during the life of the loan. So it needs to be handled in the right way. For homeowners more than a month behind, quick action is needed in order to complete the modification process.

Essentially, the program gets your mortgage payment, including insurance, interest, taxes, insurance and association fees, reduced to no more than 31 percent of your gross monthly income. This is accomplished by adjusting the mortgage interest rate, the loan term and principal amount, in collaboration with your lender.

With interest rates as low as 2% per year and terms as long as 40 years, principal reductions come by a delay in a portion of the principal or by forgiveness of part of it. But the reduced principal amount cannot be lower than the value of the home.

However, lenders are not required to take part in the loan modification program. To encourage their participation, the government is offering incentives to these companies. For example, for every year that a borrower remains in the program, the government will give the lender $1000 for up to 3 years. Then of course there is an incentive for the borrowers as well to stay in the program, the government will give an additional $1000 to the borrower by applying it directly to the principal of their loan over a 5 year period.

Even borrowers who are in foreclosure or bankruptcy may be eligible, although the court may order the loan modification, in the case of bankruptcy.

There is fantastic opportunity for eligible borrowers in the loan modification programs. If you are in one of these, then you should seek a consultation with a professional who can help you into the program that is right for you.