A loan modification is offered by banks when home owner's have a difficult time paying their mortgage payments. This type of modification is a positive for the bank because they will not be stuck with a house and no money and for the home owner so they can remain in their home.

A bank will want to know the nature of the hardship that is causing you the inability to pay your mortgage payments. This hardship might be a divorce, a death, job loss, and more. If you qualified to purchase your home with two incomes and you are about to get a divorce the bank may feel you cannot afford the home anymore with just your income. In a case like this you might not qualify for a loan modification.

The bank will want proof you do have the ability to pay for the home loan. You will need to show the bank your capabilities financially and your income. If you can prove to the bank you can afford the payments or a modified payment they may agree to work with you. The bank will also consider the amount of money owed on the loan. If you have equity in the home your chances are better for the bank to work with you. If you have purchased the home in less than two years the bank may be tougher on you with your situation.

The biggest factor a bank is going to consider is what situation is better for the bank. After reviewing all of your information and the proof you can pay the bills they will make a decision if they will give you a loan modification or if you will be forced to foreclose. Whichever decision is better for the lender will be the ultimate decision. If you are in an area where there are foreclosures everywhere and no one is buying the decision most likely will be in your favor. If homes are selling and the home is in good shape, in a good location, and will for sure sell, you might be out of luck.

A bank is going to consider many things if you talk to them about a loan modification. You should talk to your lender about this if you are in danger of foreclosing on your home due to extenuating circumstances.