A modification means just that.  You can modify your loan in which you can go to a lower interest rate for so many years  in the case of an arm or you can go from an arm loan rate to a fixed rate.  There are a few issues that you need to know.  Normally a bank will charge you a fee for a modification.  This can be anywhere from $400 to $1500 and up.  Be sure you know what the cost will be before you decide to do a modification. Is it affordable for you?  In certain situations this fee can be negotiable.  The lender normally will not check your credit nor will they pull a new appraisal.  However they will do some kind of a value analysis.  If your value has decreased so much that there is not enough equity in your home anymore then you may not be able to modify the rate.  You will need to be current on your payment with no lates in the past 12 months.  This may vary with some lenders. 

However there may be good news in that President Obama has requested that banks do modifications with no appraisal or credit report and it is okay if you have collections or you have been late on your mortgage in the past year.  Most banks are not listening to the President so they have their own agenda. 

Now there are modification packages out there that are affordable and you can obtain the paperwork and do your own modification for a small fee.  One company I know is charging only $97 for the packet.  Now that is affordable!!
  
            Go to www.mortgagemodificationsystem.com 

There is another place that is absolutely free--but they take quite awhile to get it done and they will make the lender give you the payment that you can afford, not necessarily what the going interest rate happens to be.

                               Go to www.NACA.com

Something you should know is that your credit rating may be reduced in that the Lender may report that the note is not being paid as agreed.  

                  Go to  www.EmpireMortgageColorado.com