Quick answer
A loan modification is a change to your mortgage’s terms — such as extending the years you have to repay, lowering the interest rate, or forbearing or reducing part of the principal — that the servicer agrees to so the payment becomes affordable and you can keep the home.
Key facts
30days
Servicer must decide on a complete application within
12 CFR 1024.41(c)(1) (Regulation X) · Oct 29, 2026
37days
Applies to applications received more than this long before a sale
12 CFR 1024.41(c) and (g) (Regulation X) · Oct 29, 2026
120days
No first foreclosure filing until the loan is more than
12 CFR 1024.41(f)(1) (Regulation X) · Oct 28, 2026
Example: two ways to lower the payment
You owe $250,000 at 7.24% with 25 years left, so the payment is $1,805.
- Longer term. Stretching the balance over 40 years at the same rate cuts the payment to $1,597, saving $208 a month — but adds about $225,105 of interest over the life of the loan.
- Lower rate. Cutting the rate by one percentage point, with the term unchanged, brings it to $1,648, a saving of $158.
Run your own figures through the mortgage payment calculator. Many modifications also add missed payments to the balance. Make sure you understand the new payment and the total you’ll owe; if you still can’t pay after a modification, you may lose the home.
How the review works
Apply through your servicer. If your complete application arrives more than 37 days before a foreclosure sale, federal rules require a written decision within 30 days, and the first foreclosure filing generally can’t come until you’re more than 120 days behind. Servicers often start with a trial payment plan. Never pay a company upfront to get a modification — housing counselors help for free. If keeping the home isn’t realistic, compare forbearance and a short sale.
Sources
- Freddie Mac Primary Mortgage Market Survey — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- 12 CFR 1024.41(c) and (g) (Regulation X) — Loss mitigation protections apply to complete applications received more than this many days before a foreclosure sale; Servicer must evaluate a complete loss mitigation application and send a written decision within; Servicer cannot make the first foreclosure notice or filing until a closed-end mortgage is more than this delinquent (Oct 29, 2026)
- CFPB: What is a mortgage loan modification?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.