Lets be pristinely clear. The term Loan Modification means changing or modifying the terms of an EXISTING loan. A Refinance is a NEW LOAN usually done to cash out some of the equity in a house or to get a better interest rate that now exists. However you want to say it, its effects are similar. The conditions to apply for loan modification differ from refinancing in that the application for loan modification requires proof of hardship. This is not difficult to do in todays economy.