Restructure Payment of Past Due Amounts: Loan Modifications may include distribution of past due amounts and fees (arrears) over the remaining months of the loan, placing the arears into a balloon payment that is paid at the end of the loan or paid when the home is sold, or completely forgiving the amount.

Interest Rate Reduction: A modification can also include freezing or reducing interest rates for a short period of time or through the loans maturity. This is especially helpful with those homeowners with adjustable rate mortgages (ARM's)

Principal Reduction: In some cases, the lender may be willing to reduce the principal amount of the loan balance to match the homes' current value.

Some of the more dramatic Loan Modifications may include all three methods, Restructure payment of past due amounts, interest rate reduction and principal reduction. There is substantial documentation and paperwork to be compiled and submitted as well as "forceful persuasion" by the mediator to achieve a desirable result. A typical loan modification can take up to sixty hours, or more, to negotiate.