When the warmer weather finally arrives it will usher in the busiest season of the year for marketing and selling real estate, and many GLBT homeowners are eager to list their homes. But despite the fact that the overall real estate market is showing signs of improvement, many GLBT homeowners are still underwater on their loans. Even if they do sell they cannot possibly raise enough cash to pay off their existing mortgages.

California is a textbook example of the troublesome phenomenon plaguing GLBT homeowners across the nation. The state has long been one of the most popular destinations for GLBT homeowners. But it has also been one of the markets hardest hit by the real estate recession, and it continues to rank high in terms of foreclosure volume.

The recent housing crisis taught many homeowners that the bigger they are, the harder they fall. The Golden State was one of the most lucrative states for real estate several years ago, and the median price for a single family home in California climbed to around $550,000. But when the bubble burst prices fell precipitously. Now that median price is below $300,000 and many Californians own property that is worth considerably less than the outstanding balance on their mortgage. In fact, it is not uncommon for owners to owe hundreds of thousands of dollars more than their homes can fetch on the open market.

In order to sell some homes in California the owners have to be willing to take a net loss of $500,000 or more. The only viable solution in this kind of situation where the homeowner is extremely upside down or underwater on a loan is to do a radical mortgage loan modification.

A loan modification is essentially a legal agreement negotiated between the mortgage lender and the homeowner to change the fundamental terms of the mortgage contract. The goal is make it easier for the homeowner to make their monthly payments and avoid foreclosure, which can devastate the homeowner and is also very costly for the lender. Banks and mortgage companies typically lose as much as 50 percent of their investment when they are forced to take back a property through foreclosure, so they have a financial incentive to work with struggling homeowners. The federal government’s Making Home Affordable program also provides some additional cash incentives to banks and other lenders who do successful modifications on qualified loans.

Loan modification can be accomplished in a variety of ways. Some lenders agree to extend amortization or payback periods to stretch out the repayment of loans and lower the monthly payments. They may offer a lower interest rate than the one now attached to the mortgage, to ease the burden of payments and make them more manageable. In rare cases the lender will even forgive a substantial portion of the principal.

But mortgage lenders and banks have been notoriously slow to respond. Many GLBT homeowners have watched their homes go to the auction block while they were waiting for answers from procrastinating lenders. Those GLBT homeowners who are underwater on loans should not give up, though, and should continue to press lenders for answers and action. If possible, borrowers should use a non-profit loan modification advocate or a qualified real estate attorney to help push their cases forward and pressure lenders to be more proactive.

The bottom line is that loan modification to save GLBT homeowners is still possible, but it requires great tenacity. Not everyone will quality. But those who seek professional guidance and take steps to show lenders that they can repay modified loans will definitely improve their chances.