The warm sunny state of California is home to USA's 50 largest cities. However in recent financial crisis this most populous and one of the wealthiest states has faced a wave of foreclosures. Despite a 4 % decrease in the foreclosures last month, California recorded second highest number of foreclosures coming after the neighboring state of Nevada. With a recent story on LA Times saying that the country may soon be facing another wave of foreclosures, it is all but imperative that the people in California know hoe best to protect their homes from foreclosures. With many homeowners under an immediate risk of foreclosure and struggling under high mortgage rates the best option can be Loan modification or loan workout.

Loan modification has been promoted as the most prominent way to help people save their homes from foreclosure. Loan Modification involves negotiating with your lender to lower the mortgage rates on the account of financial difficulty. The negotiation process involves a hard bargain with your lender to secure the best deal for your loan modification. The factors that determine whether you are eligible for a loan modification or the amount of mortgage rate reduction you can secure are as below:

1. Nature and seriousness of the Financial Hardship Causing Your Mortgage Problems

2. Ability to pay

3. Amount Owed

4. Equity in the property

5. Future financial situation

The bottom line is if you have a sustained source of income and you are able to pay even a lowered rate of interest then you are most eligible for a loan modification. If that is not the case you will be advised to go for a short sale.

A California based loan modification attorney or firm can help you prove your financial need and make and implement a plan for lowering the mortgage rates. They are better suited to identify and use any legal violations in your contract as leverage, allowing you to get more reasonable rates. A good California loan modification attorney will keep negotiating until your bank offers real mortgage assistance, not just a temporary fix.

In the recent times many loan modification assistance firms have mushroomed in California claiming to handle the loan modification process for you. Many of these are not even legal, which has led to an increased rate of frauds. So it is always better to research about the credentials of the firm before you hire them. A safer bet is a California based Attorney firm which is registered under the state laws. Such a California based Loan Modification attorney will be more aware about the California Foreclosure Laws and can help you get the best loan modification deal.