The Common Law focuses on two subsets of mortgage modifications: those reserved for in the original mortgage agreement and those that are not. Both the FHA and VA have established new loss mitigation options to provide payment reduction to delinquent borrowers.(ii) Recording the mortgage modification agreement is necessary to maintain priority of the mortgage; and. The Modification Agreement defines the changes to the home loan. The mortgage modification agreement is a legal document between a lender and borrower to change an existing loan's terms. An experienced bankruptcy attorney can open negotiations and craft an agreement to modify the mortgage. Struggling to pay your mortgage? Learn how the Flex Modification program works, as well as other options for changing your loan terms. All parties on the loan must agree to participate in the modification process.