In today’s economy, the average American family finds themselves in a seemingly insurmountable mound of debt. Home loans, car loans and credit cards are rapidly burying struggling families all across the nation. One of the most prominent manifestations of this is the high percentage of people losing their homes, or in jeopardy of doing so. For some, this may be the time to consider utilizing a Wells Fargo loan modification.Mortgages and their high interest rates have taken their toll on millions of people across the US. While many find themselves barley staying afloat, there are steps that can be taken in order to alleviate some of the financial weight. Loan modification is one option that lends itself to those in need. However, there are qualification guidelines that need to be met in order to secure this type of help.Your debt-ratio will need to be assessed and analyzed as part of the Wells Fargo loan modification process. They will take into account how many revolving lines of credit that you have, how timely the payments are, and your current household income in comparison to your current household spending. These figures will determine whether or not you qualify for a lower monthly mortgage payment.Wells Fargo will then be able to use a number of options at their disposal with which to help in lowering your current payments. Targeting about 38% of your income on a monthly basis, if approved, the modified payment options can include extending your loan term up to 40 years, a reduction in the interest rate, deferring a portion of the balance of the existing loan interest free, or in extremely rare instances principal reduction.Principal reduction reassesses the loan in comparison to the current fair market value of the property. Then generates a new reduced loan based upon that number instead of the one that the house was originally valued at. This is ideal for the borrower, banks stand to lose a lot in this manor and therefore tend to lean more towards forbearance in order to maintain profitability.