With home foreclosures at an all time high bankers and clients alike are looking for solutions to save properties from foreclosure. Banks have realized that foreclosures can be costly on their part. And what homeowner will be happy to have their property foreclosed? Both are looking for solutions. One is by accepting loan modifications.

A loan modification is made by a lender in response to a borrower’s inability to repay a long term loan. It can come in the form of a reduction in the interest rate, an extension of the length of the term of the loan or both. It may also involve taking out a different kind of loan. Banks are open to negotiations of this type because it is a less costly process compared to the cost of a client defaulting. It can be viewed as a win-win solution for both the lender and the borrower.