Your mortgage modification and ‘net present value’ calculation
After ten months of the Home Affordable Mortgage Program (HAMP) the press is writing about the Net Present Value or NPV that is used to help calculate the prospect of a mortgage modification. As ususal, the reporters who author these articles don’t actually negotiate mortgage modifications, so most of the information is correct, but not all of it. In the article linked below, it’s obvious the reporter got his information from the banks and loan servicers. He didn’t consult with any successful mortgage modification firms. If they had, theywould have gotten a more complete picture.
As I’ve written before, the distressed homeowner or housing counselor will never see the NPV calculation. The attorneys I represent don’t see it either. But we can and do reverse engineer the calculations based on the hundreds of successful mortgage modifications we have acheived. Since we speak to the actual loss mitigation decision-makers, we speak their language. It is not the pass-fail decision that this author thinks it is.
The author initially leads the reader to believe that NPV is the only variable used to grant or refuse mortgage modifications. Not true. But then they go on to discuss the hardship letter and it’s influence on the mortgage modification application. Having counseled hundreds of mortgage modification applicants, we’re pretty good at advising clients on successful hardship letters.
The author almost writes the bottom line on a mortgage modification but not quite. How successful a mortgage modification is depends on the advocate for the homeowner. No one is better at these negotiations than a national attorney, located across the street from your lender, who has negotiated hundreds of successful mortgage mofifications, who has a stack of them in front of him/her.
The author never mentions short sale as an alternative to mortgage modification. That is an oversight. Some mortgage modifications are not to be. One of the companies I represent has software approved by the U. S. Dept. of Justice to estimate the success of a mortgage modification. We can advise the distressed homeowner of the likelihood of a successful mortgage modification before they actually apply.
It is absolutely false that a credit score is used to calculatea mortgage modification. Debt load is taken into account. We routinely get mortgage modifications approved contingent on debt settlement. The two go hand-in- hand many times.
Do not waste your time selling your mortgage mod application to the person on the phone. They can’t help you. You’re talking to a call center. They make no decisions. How one writes the hardship letter is the ticket to success controllable by the distressed homeowner.
Applying for a mortgage modification on your own, or even with free counseling, is a recipe for failure, no matter how many times you apply.
If you’re waiting for NPV calculations to be made public, go to Hellen Wait.
There is a quote about the ‘goodwill’ of loan servicers. It’s well known in national attorney circles that negotiate modifications, that servicers make more money on foreclosures. Convincing these guys to do the right thing is a critical negotiation, not meant for amateurs.
Call me and I’ll get you to the front of the line in modifying your mortgage, or an efficient short sale if that’s better for your situation.
Read it here
