Unless you've been buried in a vault somewhere for the last three months, you've probable heard that about half of mortgage modifications fail and the borrowers end up in foreclosure anyway. What you might not have heard is the reason for these failures. And many who publish this news have apparently not thought it worth the trouble to tell folks how they can avoid becoming one of these sad statistics.

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In the beginning...

In the early part of the recession, homeowners who had trouble paying their mortgages were offered modifications but they weren't especially helpful. Lenders merely added the missed payments to the mortgage balance (which allowed them to show the loan as current on their books). Borrowers' payments actually increased under these terms, so it's no wonder that modifications failed as often as they did.

HAMP mods are different, but still failing

However, today's HAMP mods provide meaningful relief for those who complete the tortuous process of getting them. The mortgage payment is cut to no more than 31% of the borrower's gross income. So why, then, are these new and improved modifications failing? Analysts think it's because while folks struggle to live on less, credit cards are run up, late payments accrue, and bank balances evaporate. Many who fail still have high debt-to-income ratios -- on average, homeowners with failed mods have back-end ratios (house payments plus other monthly bills) of 61%. That's well above the maximum of 38% recommended by experts. Imagine, if you have income of $3,000 a month, you'd be paying $930 a month for your home and a total of $1,830 for your home, credit cards, student loans, car payments, etc. That leaves $1,170 for your taxes, food, utilities, cable, phone, gas, everything. Maybe when you incurred these bills, you had income of $6,000 a month.But now you have $3,000 and you're in trouble.

Modification is only the beginning

If this sounds like you, your mortgage modification is likely to fail, and you're likely to lose your home. You have to take care of the other part of your problem. See a credit counseling service and find out if there is a way to get your debt down to less than 45% of your gross income. If they can come up with a plan to get you out of debt in two or three years, commit to it and do the work. Or contact your creditors yourself and see about settling your debts or getting on a workable payment plan. Again, you should be able to get clear in two to three years, or most experts don't think it has much chance of working.

Get professional help

If you are so far behind that a three-year plan won't work, or if your creditors won't provide sufficient relief, talk to a bankruptcy attorney. You may be able to discharge all of your unsecured debts with a Chapter 7, or be out into a workable three-to-five year payment plan with a Chapter 13. Either way, your debts will be scaled back to a more reasonable chunk of your income. Increase your chance of success with your mortgage modification. Get your other debt under control, one way or another.