There are always people ready to take advantage of other people in desperate situations and the current home foreclosure situation is no different.  A whole cottage industry has sprung up made up of predators prepared to charge large fees for helping someone avoid foreclosure through a loan modification. 
The vast majority of these people simply take a person's money and perform no service whatsoever.  I am sure that there must be a few people who actually attempt to do what they have been hired to accomplish and I am sure that on occasion a loan actually gets modified. 

There has been a great deal of publicity about money being infused into banks and financial institutions by the government. A significant portion of that infusion is supposed to be used to modify existing mortgages that are in default or are on the verge of foreclosure. In addition, there has been a great deal made by various government or semi-government agencies about their assistance in loan modifications and/or accelerating the process.

 
Dealing with the Internal Revenue Service is a scary proposition, especially if you owe them money.  The Bankruptcy Court is one of the tools a taxpayer has at his/her disposal in dealing with "the tax man" in a variety of situations. 
The Bankruptcy Court can be used to:
 -Stop wage garnishments, bank account garnishments, levies, seizures of property and remove income tax liens that are in excess of the value of the property claimed as exempt;

 
The "Means Test" is  part of the bankruptcy code which determines if you  qualify for a Chapter 7  or  a Chapter 13 Bankruptcy.   A Chapter 13 Bankruptcy  also determines your disposable income.  Disposable Income is the amount of money you have to pay out of your monthly income to the Chapter 13 Trustee which in turn gets distributed to your unsecured creditors.

 My general rule of thumb is a person will be able to obtain a credit card on reasonable terms after two (2) years of your bankruptcy discharge.  Now you can acquire an FHA loan to buy a house after two (2) years from your bankruptcy discharge. Take time in choosing your new credit card and mortgage because terms and conditions vary from company to company.  FICO scores are important to some while others value how long it's been since you were past due on any obligation.

According to multiple sources, including the American Bankruptcy Institute and the National Association of Consumer Bankruptcy Lawyers, efforts to amend the bankruptcy code to allow bankruptcy judges to modify home mortgage including reducing the outstanding debt to the current market value and modifying the interest rates to current rates is moving forward.  It is not clear what the final legislation will look like inasmuch as there are multiple versions of the amendment being offered and there is bound to be last minute changes to the legislation as well as changes made to resolve differe

It has been said that if you tell a ‘story' often enough over a long enough period of time, sooner or later people will become to believe the ‘story' to be the truth regardless of how outrageous it is.  This is exactly what has happened concerning the proposed changes to the bankruptcy code; to allow bankruptcy judges to deal with home mortgages by restructuring the loans and by reducing the debt to fair market value of the property.