I am sorry to hear that you are experiencing financial difficulties; the Consumer Financial Protection Bureau precludes foreclosure while a loan modification is pending - please see homeowner rights here:
However, many people will try to stay current because it does not stop the foreclosure process; so for example if the homeowner is delinquent and the loan modification request is denied, the auction date can be predetermined which can expedite the foreclosure process. Also if a homeowner defaults on the modification agreement that can result in the lender calling for repayment (immediate) of any delinquent amount- please see below for more information:
Also there is no guarantee that if a temporary modification is approved that it will be permanent.
Lending institutions can be very distant; a bankruptcy proceeding can buy time (ie the bankruptcy stay) but generally does not provide much relief. CH 13 is available for homeowners that need to restructure their debt, but to be effective it typically requires enough income so the person can afford their mortgage.
Furthermore one need only show dire circumstances versus actual default to qualify for loan modification programs.
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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.