Loan modifications occur when you work with your mortgage holder to adjust the original terms of your loan. In most cases, this involves lowering your interest rate, which in turn lowers your monthly payment. Ideally, the adjustments will lower the payment enough that you will be able to continue making the payments and no longer be at risk of foreclosing on your property. Sometimes loan modification agreements also give you an opportunity to catch up on missed payments as well. While most mortgage companies are willing to work with you in order to avoid foreclosure (a foreclosed property that comes into their possession can ultimately cost them money), there is no guarantee that your request for a loan modification will be granted. It’s also unlikely that you will have the real estate law knowledge required to get yourself the best deal.