Unlocking the Secrets of the Net Present Value Test

Our office receives daily calls from homeowners who have become frustrated as their loan modification process either drags on with no end in sight or comes to an abrupt halt as they are disqualified for a modification by their lender. Many have met all the requirements put forth in their trial modifications only to be declined for no apparent reason by their lender. Others struggle with submitting the required documentation to either start the process or to provide income verification.

Whether they have hired representation or are working directly with their lender in trying to get their home loan modified, these homeowners come to us seeking answers on both their loan modifications and whether filing bankruptcy might make for a better option. We find that the one thing that these homeowners have in common is that they are unaware of single factor that may be causing all the problems with their loan modifications; the Net Present Value (NPV) test.

If you are in the loan modification process, the NPV test is going to play a significant role in determining whether your application is approved or declined. It’s also very likely that if your modification is declined, the role of the NPV test in that decision will never be cited as the reason. This formula for this test, which has never been shared with the public, calculates the value of your mortgage note under a variety of scenarios including modification, short sale, or foreclosure. In many cases, this formula and its findings are more important to the lender than your income, expenses, and your credit score.

To read about the experiences of others trying to modify their loans, click on the following links:   

Chase Bank - http://www.consumeraffairs.com/finance/chase_mortgage.html 

BankAmerica/ Countrywide - http://www.consumeraffairs.com/news04/2010/06/ftc_countrywide_settlement.html http://www.consumeraffairs.com/finance/ba.htm

American Home Mortgage -  http://www.consumeraffairs.com/finance/citi_mortgage.html http://www.consumeraffairs.com/finance/american_home_mortgage.html

Fortunately, a new software driven program known as the REST Report is now changing the game by giving homeowners and their representing attorneys the same information as lenders receive from the NPV test. Prior to going into the loan modification process, the report produces an 11 page analysis starting with detailed financial information and other data on the property in question as well as a full picture of the homeowner’s finances. The REST Report then takes this information to determine the NPV calculations used by the lender and details several financial outcomes and modification options.

The REST Report also analyses your property and financial data to determine whether your mortgage falls within the guidelines of the Obama Administration’s Home Affordable Modification Program (HAMP). If the mortgage doesn’t qualify for HAMP, the report provides options for loan modifications through other venues.

What it all means is that you don’t have to go into your loan modification process without the same information as your lender. The REST Report delivered by the bankruptcy attorneys at Zhou & Chini levels the playing field and provides the tools necessary to get your loan modification done. For a free consultation on how a REST Report can strengthen your negotiation position with your lender, visit zhouchinilaw.com/or call (800) 972 9600 today.