At the heart of the President Barack Obama's ambitious plan to rescue the housing market is the conviction that restructuring distressed mortgages will keep struggling borrowers in their homes and help insert a floor beneath plummeting property values. Whether you call it a loan modification, mortgage modification, restructuring, or workout plan, it’s when a borrower — who is facing great financial hardship and is having difficulty making their mortgage payments — works with their lender to change the terms of their mortgage loan. The workout plan could result in temporary or permanent changes to the mortgage rate, term and/or monthly payment of the loan as the plan’s goal is to help the borrower reduce their monthly mortgage payments. One word of caution: this new bill has spawned a whole new wave of loan modification salespeople who might be perfectly fine and those who are not. Be careful. Also, it’s always good to hire legal counsel. Get a referral from your local bar association. Because when dealing with anyone who specializes in this field, it may be best to deal with someone who is local in the event any problems arise - it is easier to speak to someone who has an office a mile away from you than someone who has an office at the other end of the country.
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