We applied for a loan modification quite a while ago. For some reason the bank kept putting our account into foreclosure even though EVERY payment was made in full and on time. Every month we prove we are not in foreclosure or even late and they say it won't happen again. It has been incredibly aggravating, esp with all the other challenges right now. We finally got a document saying that the legal foreclosure has been discharged (court document - when they processed our 1st years payments they didn't do it right and then tried to foreclose. we fought it and won, of course.) Now they have sent the paperwork for the modification to be signed and re-submitted. HOPEFULLY it will go through. It is to take advantage of the government program with all the bailout $$$. Please keep your fingers crossed for us!!!! It would cut our payments by several hundred dollars a month and still keep us on a 15 yr loan with about 10 yrs left! The govt money is sitting there for banks to use to rewrite loans. Sadly many banks are refusing to use it. There are a LOT of people who are walking away from houses, declaring bankruptcy, even if they can pay the mortgage. It is because they owe more than the property is worth. Some of them are in my neighborhood, but things are starting to turn around. I find it incredibly irresponsible for a bank to have bailout money sitting there and refuse to modify a loan, preferring to foreclose instead. The VP at Chase I spoke to told me he would rather foreclose on 10 houses than modify them. All because they don't "have" to modify them.