If you are having problems making your monthly mortgage payment, and are possibly on the verge of foreclosure, you may qualify for a loan modification. A previous client of mine, whose mortgage was held by Countrywide Bank, was in foreclosure with a scheduled date for the Sheriff's sale. However, after discussions with the lender, Countrywide rescinded the foreclosure and worked out a loan modification program whereby her interest rate was reduced to 4.5% and her principal balance reduced to fair market value. The lesson here is to  make every attempt to talk with your lender to see what options/programs are available to you. After all, foreclosures are a costly alternative for the banks and they too would like to keep you in your home, if at all possible.