Loan Modification
Also called: mortgage modification, restructuring a loan, workout
A loan modification permanently changes the terms of an existing loan — rate, term, or principal — to make payments affordable, usually to avoid a foreclosure that would cost the lender more. It differs from refinancing, which replaces the loan entirely and requires you to qualify anew; modification is negotiated precisely because you can't. It typically marks your credit, but far less than the foreclosure or default it prevents.