Mortgages are modified to the benefit of the borrower in one or more of the following ways: Reduction in interest rate, or a change from a floating to a fixed rate, or in how the floating rate is computed
Reduction in principal
Reduction in late fees or other penalties
Lengthening of the loan term
Capping the monthly payment to a percentage of household income
The borrower can be current, late, in default, in bankruptcy, or in foreclosure at the time the application for modification is made. The programs available will vary accordingly.
