Mortgage modification, more commonly known as loan modification, is a process that is used to improve a loan that cannot currently be paid by its borrower. Many times, the homeowner involved in a mortgage becomes financially unable to pay their loan, due to unforeseen or undesirable circumstances, such as unemployment or an unexpected financial burden. With their financial decline comes an inability to pay their mortgage, which places them in danger of possible default and foreclosure. That said, loan modification generally occurs as a way to avert a foreclosure or other such issue that is forthcoming. The process that takes place in a mortgage modification involves assessing the homeowner's finances, and then establishing new mortgage terms that are conducive to these finances. These mortgage modification programs may be offered by lenders, usually via government programs.