Many mortgage servicers still offer long-term payment changes when you can show a real hardship and afford the revised monthly bill.
A mortgage can feel steady for years, then one change flips the math. A job shift. A rate reset. Taxes and insurance rising. A medical bill that won’t stop. When that happens, it’s normal to ask: Are Loan Modifications Still Available?
If the payment no longer fits, you may wonder if the loan terms can be adjusted so you can stay put. That’s where a loan modification comes in.
This article explains what’s still offered, how servicers decide, and how to file a package that gets reviewed instead of bounced back for missing pieces.
Are Loan Modifications Still Available?
Yes, many servicers still offer modifications. The part that trips people up is that there isn’t one nationwide program with one form and one set of rules. Your options depend on who owns or insures your mortgage.
If your loan is conventional and owned by Fannie Mae, the standard structured path is the Flex Modification. Fannie Mae describes it as a set of steps aimed at reaching a 20% principal-and-interest payment reduction target for eligible borrowers. Fannie Mae Flex Modification.
If your loan is conventional and owned by Freddie Mac, servicers follow Freddie Mac’s servicing guide, which directs them to evaluate eligible borrowers for a Flex Modification under guide rules. Freddie Mac Guide Section 9201.2.
If your loan is FHA-insured, HUD lists home-retention loss-mitigation choices that can include a loan modification route. HUD FHA loss mitigation program.
Why Approval Depends On Your Loan Channel
A modification changes the contract for years, so the investor or insurer behind the loan sets the rules. The servicer handles the paperwork and the review, but it can’t ignore the rule set tied to your loan.
That’s why two neighbors with the same servicer can get different answers. Their loans may be owned or insured by different entities, with different required steps.
What A Loan Modification Can Change
A modification is a permanent change to one or more terms so the payment becomes workable on a steady basis. The most common levers are the interest rate and the length of the loan.
Missed payments might be handled by adding amounts to the balance in a structured way, or by setting part of the balance aside so it’s not included in the monthly principal-and-interest calculation, depending on the rule set and the offer.
Servicers also look for a payment you can keep paying month after month. If the revised payment still doesn’t fit your budget, the file may shift toward other loss-mitigation options.
What To Do Before You Call Your Servicer
Doing a short prep session can save days of back-and-forth. Write down:
- How many payments you’ve missed, if any
- The date your hardship started
- How your monthly income changed
- How your monthly expenses changed
- The payment you think you can make now
Keep your notes plain and numeric. Servicers move faster when your dates and amounts are consistent across forms.
Are Loan Modifications Still Available For Conventional And Government Loans?
Most mainstream loan types still have formal home-retention routes, but the names and rules change by channel.
Start by figuring out what you have: conventional (often owned by Fannie Mae or Freddie Mac), FHA, VA, USDA, or a portfolio loan held by a bank. Your servicer can tell you, and you can also check if your loan is owned by Fannie Mae or Freddie Mac through their lookup tools on their sites.
How To Start The Process Without Getting Stuck
Ask your servicer for the loss-mitigation application checklist and the upload or mailing instructions. Then ask if they require a “complete package” before review. Many do.
When you submit, send one organized bundle and keep proof of delivery. If you upload, keep screenshots or a confirmation email. If you mail, use a trackable method.
If you want a consumer-friendly overview of mortgage relief choices and how to work with your servicer, the Consumer Financial Protection Bureau has a mortgage help hub. CFPB mortgage help.
What Servicers Commonly Check During Review
Hardship With A Clear Start Date
Servicers want a clear reason the payment stopped working. Keep the explanation concrete: what changed, when it changed, and how many dollars per month it shifted.
Income That Can Carry The New Payment
Expect to show current income. For hourly work, that’s often pay stubs. For benefits, it may be an award letter. For self-employment, you may need a mix of bank statements and tax forms, plus a short note explaining your cash flow.
Property And Occupancy Facts
Some programs handle a primary residence differently from a second home or investment property. Your servicer may confirm where you live and whether taxes and insurance are current.
Common Home-Retention Paths You May Hear About
Use this table as a map for the phrases servicers use. Your file will be routed based on your loan channel, delinquency status, and the documents you provide.
| Loan Channel | Typical Home-Retention Route | What It Usually Adjusts |
|---|---|---|
| Conventional (Fannie Mae-owned) | Flex Modification | Rate and/or term steps aimed at a lower principal-and-interest payment |
| Conventional (Freddie Mac-owned) | Flex Modification | Rate and/or term steps under Freddie Mac guide rules |
| FHA-insured | HUD loss mitigation home-retention options | Modification route, partial claim, or a combination structure |
| VA-guaranteed | Servicer VA retention workout | Term and payment adjustments within VA program rules |
| USDA | Servicer USDA retention workout | Payment adjustments based on USDA servicing rules |
| Portfolio loan (bank holds the note) | In-house modification | Negotiated rate/term changes set by the lender’s policy |
| Private investor securitization | Investor-specific modification | Varies by pooling and servicing rules |
| Disaster-impacted area | Disaster-related retention options | Often starts with short forbearance, then modification review |
Building A Packet That Moves Fast
Servicers deny or delay files most often for missing documents or forms. Build your packet so a reviewer can check each item in one pass.
Common Documents
- Income proof for each borrower (pay stubs, benefit letters, or other proof)
- Two to three months of bank statements, all pages
- Tax return or transcript, if requested
- Monthly budget worksheet
- Hardship letter with dates and dollar changes
- Signed servicer forms and authorizations
Clean-Up Moves That Save Time
- Include every page of every statement
- Explain large deposits with proof
- Use file names that match the content and date
- Keep a simple call log: date, time, name, and what was said
How The Decision Stage Usually Works
Once the servicer marks your package complete, it evaluates you for one or more workouts allowed for your loan. Many borrowers are offered a trial plan first.
A trial plan is not a “maybe.” It’s a test run. Pay the trial amount on time and keep proof of each payment. Miss it and the offer can be canceled.
If you get an offer, read the full terms before you sign. Make sure you understand the rate, term, monthly payment, escrow treatment, and any amount set aside for later.
Costs And Tradeoffs To Watch
A lower payment can come from stretching the term, lowering the rate, or both. Stretching the term can raise total interest paid over the life of the loan, even if the monthly bill drops.
Ask for a written breakdown of the offer and compare it to your current loan. If something looks off, ask the servicer to explain it in writing.
Scams And Bad Tactics To Avoid
Guarantees For A Fee
No third party can promise an approval. If a company asks for a large upfront fee and claims it can “force” a servicer to approve you, pause and verify before you pay.
Silence During Review
Open every letter from your servicer and respond by the listed deadlines. If your contact details change, update your email and mailing info right away.
Stopping Payments To Force Review
Some borrowers stop paying to try to trigger review. That choice can add fees and make the situation harder. If you’re already behind, work on getting a complete package in quickly and tracking every step.
Timeline Checklist
Use this table to keep momentum and reduce missed steps.
| Stage | Your Actions | What You May Receive |
|---|---|---|
| Days 1–3 | Call, confirm loan channel, request full checklist and forms | Submission instructions and disclosure forms |
| Days 4–10 | Gather income, statements, budget, and hardship letter | Request for missing items if your packet is incomplete |
| Days 10–14 | Submit one complete bundle with proof of delivery | A receipt notice and a “complete package” notice |
| Weeks 3–6 | Answer follow-up requests fast; keep your log updated | Status updates and an evaluation decision notice |
| Weeks 4–8 | Review offer terms and ask questions in writing | Offer letter, trial plan terms, and due dates |
| Trial period | Make every trial payment on time and save receipts | Final agreement after successful trial payments |
| After signing | Store the agreement and watch for the updated payment schedule | Updated statements reflecting the revised terms |
Next Steps If You’re Unsure Where To Begin
If you’re behind now, call your servicer and request the loss-mitigation checklist today, then start building the document packet the same day. If you’re still current but stressed, call before you miss a payment.
If you want a neutral starting point for understanding options and preparing for the call, start with the CFPB mortgage help hub. CFPB mortgage help.
References & Sources
- Consumer Financial Protection Bureau (CFPB).“Mortgage Help.”Consumer overview of mortgage relief choices and steps for working with a servicer.
- U.S. Department of Housing and Urban Development (HUD).“FHA’s Loss Mitigation Program.”Official outline of FHA home-retention loss-mitigation choices that can include a loan modification route.
- Fannie Mae.“Flex Modification.”Program description and payment-reduction target used for eligible conventional loans owned by Fannie Mae.
- Freddie Mac.“Section 9201.2 (Loss Mitigation Hierarchy).”Servicing guide section that describes evaluation flow that can include Flex Modification offers.