Loan Modification definition:

A Loan Modification is principally sought when you are trying to keep your home, but have either fallen behind in your payments due to higher payments because your loan has adjusted, or you are still current, but know that your loan will be adjusting to a higher monthly payment that you will no longer be able to afford.

Additionally, when you fell behind in your payments, your credit scores dropped and you can no longer qualify to do a refinance.

You are in turn seeking to have your mortgage holders modify your existing mortgage or issue you a whole new program that will lower your monthly payments by reducing your interest rate, reduce the principal balance on your home to reflect current market value, and stop any further adjustments to the mortgage.