A loan modification (sometimes called a Loan Mod) is the altering of one more of the characteristics of a loan and/or its terms. Loan Mods are usually the result of the borrower's inability to make payments in the agreed upon time-frame or because the property is worth less than the borrowers owes, has a high interest rate or an adjustable rate mortgage. This means that a homeowner has taken out a loan to purchase a property, or refinanced to cash out a loan, and not able to repay it in accordance to the preset schedule designed when the loan was taken out. They then fall behind on their payments and are face with a few tough choices...foreclosure, deed in lieu of title, short sale or loan modification. The only option of this list that does not force the homeowner to lose their home is the Loan Modification.