Loan Modifications are a possibility, but it does rely on income, as opposed to a credit score (like a refi would). Loan Mods are basically a renegotiation of your current terms with your current lender. Depending on which company you choose and how well of a job they do, you could walk away with a much better situation than what you were already in. Alot of times, these modifications are better for someone who is behind on monthly mortgage payments - as a modification could not only bring you current, but force your monthly payment down to something reasonable.
As I'm in the mortgage market, we deal with modifications all the time. If you would like some help with your loan or deciding whether to do a modification or not, feel free to contact me and I'd love to help you out.
(954)764-7064 Office (ext. 214)
If you decide to pursue a loan mod, be prepared to document every phone call, with names, titles, dates, subject of conversation. Also, follow up at least twice weekly. Be prepared for them to ask for all documents over and over again. What happens to them is a mystery to all, even the banks. But they seem to be quite cavalier about losing your sensitive, confidential information. That is very scary, indeed. Our loan servicer denied us because the only hardships they recognize are death, divorce, or loss of employment.
If you have followed the media, the number of successful modifications is around 10% of all applicants. Dismal.
Good answers by Alma and Vicki.
Also if you truly have a hardship where your monthly costs ( (principal + Interest + mortgage insurance + property taxes+ Homeowners Assoc or condo fees) are above 31% of your Gross income, then you may be able to qualify for a loan modification.
The company you make your mortgage payment to is not likely to actually own the mortgage, they are merely a middleman "servicer" who is collecting the payment for the "investor". Find out who the actual investor is on your mortgage by calling your "servicer". You can also do an online lookup to see if it is owned by a GSE, Fannie Mae or Freddie Mac. http://www.MakingHomeAffordable.com
If you're qualified then make sure to send a letter via "certified" mail to your "servicer" so they can't say they didn't receive your application for a loan modification. Check online first with your servicer and send all of the paperwork required by your servicer. Then call your servicer.
The US Treasury Dept is putting a magnifying glass on servicers right now and tracking their record of modifications so now may be a good time to actually get it done!
Hope this helps.