REJECTED FOR HAMP MODIFICATION DUE TO THE NET PRESENT VALUE RESULT?
Have you been turned down for a HAMP (Housing Affordable Modification Program) loan modification because of the Net Present Value result calculated by your loan servicer? The U.S. Department of the Treasury and the Department of Housing and Urban Development do not seem to have a lot of faith in loan servicer calculations. Therefore, they have released a program on the Making Home Affordable web site for distressed homeowners to use to check their own net present value. If you come up with a different result than your loan servicer did, you have some ammunition to take back to them to make them check their figures.
Now, most people without an MBA would be asking at this point, what in the world is a Net Present Value?
NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a prospective project is positive, it should be accepted. However, if NPV is negative, the project should probably be rejected because cash flows will also be negative.
This is what investors use to evaluate an investment. In this instance, they are talking about YOUR HOME. If their numbers to not indicate that your home is a prudent investment, they will reject your request for a loan modification.
Now, if their calculations are incorrect you may be able to show them their error and you may yet qualify for a HAMP modification!
If you were rejected for a HAMP modification, you should have received written notification. With the data on that notification you can use to Making Home Affordable web site to do your own calculation.
Select this link to get to that site: www.CheckMyNPV.com
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