Mortgage modifications result in lower interest rates, extended payback periods and (sometimes) forgiven debt. A modification is one way to save a mortgage. There are other types of loan workouts:
Forbearance. This allows you to skip payments or make partial payments while you go through a temporary hardship.
Repayment plan. You pay extra every month until you catch up after falling behind.
A workout has to be sustainable over the long haul, says Sue Hunt, director of housing counseling for debt counseling giant CredAbility, in Atlanta.
"Our job is to work with the homeowner to make sure that they've presented true and accurate figures to the servicer, so that the servicer can give them the best option that's available to them," Hunt says.
Hunt adds, "If we can present the case to a servicer that the original plan is not sustainable, and there's another option available, servicers will tend to do that."