If you are interested in loan modification programs, you will find tons of information on the Internet. Unfortunately, some of the information you will find is either overly simplified or overwhelming and far too complex. What you really need to learn about this process are the things that a large number of banks neglect to inform you and the general public about. Before applying for a loan modification, you need to understand the myths and truths associated with this process, as well as how to tell fact from fiction.

A loan modification application should not be applied for lightly. The more armed you are with information that is accurate, the more empowered you are to make decisions that will result in the maximum benefit for you and your family. It is therefore critical to sift through all the misleading half-truths in order to make responsible choices.

Some of the huge misconceptions about this process are as follows:

1. Income qualification & hardship issues. People who are not familiar with the loan modification process generally think that one's source of income must have been lost in order to qualify for a program like it. This is false. Even a simple drop in your ARM interest rate which increases your mortgage payment can constitute recognized hardship, & therefore a legitimate reason to qualify for a loan modification. This is good news for families who face suffocating financial circumstances, even though their household income level has not been drastically lowered.

2. Being late on your payment. Yes, it is true that many people became eligible for a loan modification after they have missed their payment. However, eligibility as officially defined in the HAMP program and others like it states that payments do not have to be late. So, if your bank asks you to be late on your payment and you agree to do so, you should make sure that you have proof of their request in writing. If they refuse, request their permission to conduct a recorded phone conversation that clearly clarifies that point. You don't want to mess up your credit and risk facing foreclosure, unless you are absolutely sure that your loan modification application will be approved.

3. Loan modifications are exclusively federal-backed. This is untrue. There are both federal-backed mortgages such as those offered in the HAMP program, as well as private ones.

Loan modifications are becoming increasingly common as a growing number of Americans fight to hold on to their homes in the midst of one of the worst housing market challenges the country has ever faced. If circumstances have brought you to a place where you are seriously considering making a loan modification application, do yourself a favor and take the steps you can to ensure that your decisions are supported by accurate and relevant information.

For more information on loan modification programs, please visit http://www.mycaal.com