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A loan modification probably seems like a daunting prospect. After all, you're in a difficult financial position, and it's never easy to ask for help. Particularly not when getting that help will involve things like providing details of your income, or writing a hardship letter outlining your problems. There are, however, good reasons why you should consider it:

1. It will reduce your debt to a level you can meet. The government scheme suggests that loan providers should find ways of arranging your debt so that you aren't paying more than thirty-eight percent of your monthly income on your loans- thirty-one percent once the government has contributed to it.
2. It will let you stay in your own home. The whole point of the loan modification scheme is to prevent honest, hardworking people like you being forced out of their home thanks to the difficulties being experienced by the economy. You'll be able to stay, and you'll keep any equity that you have already built up.
3. It will let you ride out the economic difficulties. Things are still tough financially, and worrying about huge debts doesn't make reduced job prospects or poor economic conditions any easier to think about. Restructuring your existing mortgage can give you enough breathing space to get through the tough times.
4. It will give you more money each month. If you've been trying to economise to make ends meet, you've probably gotten pretty used to never having any money. Reorganising your debts won't give you cash to throw around, but it will mean that you aren't constantly worrying about every penny.
5. It will give you peace of mind. Any kind of financial difficulty is incredibly difficult, not just for you, but also for the people around you. A loan modification might just be helping you in more ways than merely the financial.

Source: http://ezinearticles.com/?Five-Benefits-of-Getting-a-Loan-Modification&id=3637556