Many Americans are facing foreclosure due to the credit crisis.  What should be your first step if you cannot make your mortgage payment?  Your first call should be to the bank.  You want to speak with someone in loss mitigation.  See if you can work out a forbearance agreement or perhaps even work out new loan terms.  Sometimes a bank will even lower your principal balance as well as interest rates.  At the least you can hope for a forbearance agreement.  This will allow you to pay back a smaller mortgage payment for awhile.  The portion of the payment not paid will be tacked on to the end of the mortgage.  At the least it will give you some relief in the present.

What Is Loan Modification?

In the banking world there is no such thing as loan modification.  This is a term that is advertised to the public as a service to buy.  The reality is that you do not need to pay someone to help you get new terms for your loan.  You can do it yourself.  Again if you ask the bank for a loan modification they may not know what you are talking about.  The correct term is loss mitagation.  Tell the bank your circumstances.  Banks do not want to take any more property back right now.  Most will want to work with you to help you out.