Loan modification is a process in which the lender works with the homeowner who is facing foreclosure or financial hardship and is having trouble making mortgage payment. The lender's goal is to change the terms of the mortgage loan and make it affordable for the borrower.  The new terms for the loan will vary from lender to lender. Some of the changes could include: Temporary or permanent changes to the mortgage rate, term and monthly payments, the past due amount could be rolled into the loan, and the new balance re-amortized. 

The main goal of the Loan Modification program under President Obama's "Homeowner Affordability and Stability Plan" announced on February 18, 2009, is to reduce the monthly mortgage payments for homeowner struggling to make the payment.

• The Lender has to bring down interest rates so the monthly payments don't exceed 38% of the borrower's income.
• This initiative will match dollar-for-dollar any further reduction until the ratio comes down to 31%.
• The principal will also be reduced, if necessary, to lower the monthly payments. The Treasury Department will share the costs. 
• Homeowner will be on a trial test with the new monthly payment for 3 months. If they make every payment on time the new rate and monthly payments will be fixed for five years. 

• Your mortgage had to be originated before January 1, 2009
• Owner-occupant (No investors) 
• Unpaid balance of $729,750 or less. 
• Be in financial hardship.

• Due to increase in your mortgage
• Income reduction 
• Suffer Hardship
• Note: If you cannot afford the home due to job loss or a complete inability to pay, you will not qualify. 

• Monthly payments have to be 31% of your gross monthly income. 

There are several non-profit organizations in Charlotte NC and surrounding areas that can help you at no cost.