Have you been wishing that you could lower your monthly payments in order to stay in your home and avoid foreclosure? You are hardly alone, as you have probably heard. You may be eligible for a mortgage loan modification, under the federal government's new streamlined program. The stimulus plan, under President Obama, offers loan workarounds for up to nearly 5 million homeowners over the next several years. You may have been wondering, already, how to find out if you are eligible to apply with your lending bank. This article contains tips and useful information on how to approach your lender to qualify for a loan workaround.

No lending bank is obligated to offer a mortgage loan modification, but the new federal guidelines make it very attractive by offering incentives to both lenders and borrowers. Due to the steep drop off in home values, banks are reconsidering the cost of foreclosure versus working out a modified loan that their borrowers can live with. Basically, the bank will do whatever saves them the most money -- that's what banks do -- but the federal government has stepped in to increase the odds in your favor.

So what is involved? Well, you need to complete some application forms, include a letter explaining your current financial hardship, and provide your lending bank with any necessary documentation in support of your claims. Your lender needs to see in black-and-white terms that you are qualified for a modified payment plan, and that you can afford and maintain a restructured agreement. Once you convince the bank of this, your odds of success are very good. Your lending institution will consider your ability to repay, your house's current market value, and the outstanding balance on the loan. If you owe the bank close to or greater than your house's current value, then keeping you in your current home under modified loan terms is probably the best bet.

Tip: Have a local realtor prepare a Comprehensive Market Analysis report, if you are unsure of your home's current value. This report is an excellent tool for building your case with your lending institution. To succeed in your quest for mortgage loan modification, your lender wants to see a complete, accurate package. So all of your paperwork must be completed correctly, in order to meet the bank's approval guidelines. The lender also wants to see you include all necessary documents on the first pass, in order for your file to move quickly through its system process. Incomplete or inaccurate files get set aside in favor of more accurately and completely prepared paperwork from other applicants. Don't let your case be delayed. Prepare your forms to ensure the best odds for approval. How to do this? And which documents will you need in order to avoid delays? Learning what you need to know is easier than you think. Start with the federal website, makinghomeaffordable.gov. Be prepared before you approach your lending bank.