If you're facing foreclosure today, you're not alone. Many Americans are facing just this situation. It might surprise you to know, though, that your bank doesn't want this to happen any more than you do. Your bank doesn't want the foreclosure to happen because it puts a burden on them that may in fact cause their failure. And homeowners, of course, don't want to lose their homes.

In most cases, today, foreclosures are a result of bad lending practices that have come into play in recent years. In previous years, home buyers had to have at least 30% of the list value of the home to put down as a down payment. They also had to be able to show that they had been employed appropriately for at least a year. However, recent changes in lending laws have titled this type of practice "discriminatory." Coupled with an incentive structure that paid large commissions for loan origination, it makes sense that bad loans have become so common.

These types of loans have commonly been referred to as "liar loans." Today, the consequences are very, very visible. They've caused massive bank failures, which have come as a result of banks' leveraging of the mortgage driven securities.

However, what's less visible is what this does to American homeowners. Literally millions of new homeowners, who were not educated on what they were getting into, moved into homes that had what are called "adjustable rate mortgages," also known as ARMs. Oftentimes, these loans were given with interest-only introductory periods, which made the payments much lower even as the principal of the loan did not figure into the payments and therefore remained at the same level. When the rates adjusted along with the Federal Reserve rate, or the "interest-only" period ran out, suddenly, many of these homeowners saw their monthly mortgage payments literally triple.

Worse still, housing has seen a sudden price collapse, which has not seen the bottom yet in many markets. What this means is that these homeowners are now responsible for mortgages that are worth much more than the houses they live in.

In this type of situation, loan adjustment can help. With loan adjustment, you can work to negotiate with your lender to get various terms of your loan modified. You might think of it as being like a refinance option, in some ways.

With a mortgage, you're dealing with two specific measures. One is the interest rate you are paying on your mortgage, and the other is the time period over which the mortgage is being paid off.

When you modify a loan, oftentimes, the interest rates are reduced, or the term of the loan itself is extended. In some cases, the lender will actually reassess the value of the home and readjust the mortgage accordingly, writing off part of the loan. In order to qualify for a loan adjustment, you must have sustained a hardship that has reduced income substantially, and you must be able to demonstrate this. However, you must still be able to show that you have a regular income stream.

To see if you qualify for a loan adjustment, talk to a specialist or a mortgage/credit counselor. You need someone in your corner who works with financial services products so that you get the best deal possible. Then, you want to talk to your lender's loss mitigation department.

A good thing about loan adjustment is that in most cases, lenders are banks will usually cooperate with you once you talk to the right person. They don't want you to go into foreclosure, because this leaves them with a house they may not be able to sell. Even though you have the current market in your favor, though, expect this process to take at least six months to a year to complete. Because of this, you'll want to plan early. If you're already getting calls or letters about your mortgage payments being behind, you'll have less chance of successfully completing a loan adjustment. If you contact a loan adjustment specialist, you'll greatly increase your chances of success because you'll speed up the process so that you're talking to the right person much sooner. If you don't have a loan adjustment specialist, you may spend a lot of your time working your way up through lower-level people who don't have the authority to say "yes" to you in regard to your loan adjustment.

Once you to contact the right person, you'll need to demonstrate that you've been financially responsible. You'll need to demonstrate you have a budget and are living within it. Having a loan adjustment is very much a last chance for you to stay in your home. If you can't make current house payments, then at least make partial payments. This way, when the loan adjustment is negotiated, the lender will probably ask you to make at least what's called a "good faith" partial payment of at least half of the back payment penalties and fees, plus attorneys' costs. You'll need to have the money on hand to be able to do this or risk losing the ability to make a loan adjustment.

Once you've negotiated a loan adjustment and have had lower payments, save the difference between your current mortgage payments and your new lower payments. Many homeowners have run into problems because they bought more home than they could afford in the first place, and then refuse to scale down their lifestyles to match their real incomes. If that's you, be realistic. And if you really can't afford your home, try to sell it; in the worst-case scenario, you may even have to let it go into foreclosure.