For homeowners struggling to keep up with ballooning mortgage payments and may be behind on mortgage payments,, loan modification may be the best option. Specifically, for FHA loans, homeowners have several options when looking into a loan modification to try to attain a more affordable monthly payment. Those options include:

• Selling the home: If you simply decide that even with a loan modification, you will not be able to afford living in your home, your lender may allow you to sell the home (usually within a pre-determined amount of time), finding a purchaser that will pay the full amount for the home. However, it is important to use a Realtor who will aggressively show and sell the home quickly.
  
  
• Modification: This is the option most preferred by lenders and homeowners, alike. It allows your lender to restructure your loan to lower your monthly mortgage payment and add any delinquent payments to the back of the loan, extending it by a certain length of time. This is the best option for those homeowners who wish to fight foreclosure while still trying to save their homes.
  
  
• Short payoff: Some lenders will allow a “short payoff” or “short sale”. This essentially means that the lender will accept less than the amount of the full loan to avoid a total financial loss. However, this option is usually only available to homeowners that are at least two months behind on mortgage payments.
  
  
• Assumption: This option may be available to homeowners that can find a buyer who is qualified (meaning a positive financial portfolio and a high credit score) to take over the mortgage, in some cases even if the loan documents do not allow for assumption. Lenders usually do not like this option. Use it as one of your last resorts as you work to stop foreclosure.
  
  
• Forbearance: Forbearance is granted to homeowners who have had an unexpected financial jolt and simply need some time to catch up. When forbearance is granted, the mortgage payment is reduced or suspended for a short period to allow the homeowner to stabilize his or her financial situation.