However, each homeowner should be on alert that there many companies are unreliable and they are doing Loan modification illegally. In this article I will explain as in California, Florida, Maryland and other states is illegal to charge upfront for a loan modification. There are at least three ways you can arrange with your bank to reduce monthly payments. Reduction of interest – The banks are well motivated to do so, current market conditions. The right way is THROUGH the Loss mitigation department of the bank. The structure has to be well planned, with much income as the state, leading to the bank’s refusal to do so and declare little income causes the non-qualification for the amendment of the loan and the bank raises suspicions and could result in a judicial foreclosure, if after decides to stop making payments and return the property to the bank.