Anyone offered Trial Payment Period?

[hope67]

Me too! I know that based on the current Freddie Rate and my current property taxes, I'm quite certain I am still going to fail the NPV test. However, I appealed my taxes (won't find out until end of October) and it should save me a bundle. Now if only I had some crystal ball to predict what the Freddie Rate will be then! One piece of good news though, when I do run my numbers, it does not show any principal forbearance to reach the 31% target DTI. So, I am wondering if I am only off by a few thousand dollars (ie the benefit for modifying is a few thousand less than foreclosing), would they forbear that same amount in my case and proceed with the modification. Ahhh, this is so stressing me out! Guess I'll just have to keep hanging in loan purgatory until October (no further foreclosure notices have been sent to me and nothing else has happened to my mod request since June so I am just in limbo).

Good luck ama125..I hope things will work out for you. Did you try to use different figures as to your taxes to see the impact..do you have an estimate as to what your taxes should be? If so try that figure..

Did they offer you a payment deferral agreement? If not, are you making payments on the loan, or did you stop?

[hope67]

I have got Fannie too. I just imputed the NPV test #'s. How do I know if I passed or failed?
It gave me at 31% payment amount.

On the right side of the worksheet under "value of modification" on line 30 next to "NPV test" it should either say fail or pass..

[licouple]

Hope67,

Are you paying PMI insurance? Thanks for the info.

[hope67]

Hope67,

Are you paying PMI insurance? Thanks for the info.

licouple,

No! What's on your mind?

[sandyg]

Just finished the NPV test and got a pass. Now I just need to make sure that the #'s are right that I imputed.

I was playing around with the gross income #'s to see what the minimum amount I needed to make each month to get a pass. It was quite a big difference in the payment amount each month.

The reason I did that was I am self employed and Fannie put me on a 3 mo. forbearance at $0 a mo. In order to give me time to increase my monthly income before taxes. And no one could give me an answer of how much of an increase I needed to qualify for a mod.

So now I have a better idea of what my income needs to be to qualify for this program.

However, I know it was mentioned that there is another NPV test for a second mtg. and I do have a 2nd.

My question is:

1. Do they only care about the 1st mtg. being at 31% & not the 2nd?
2. Or will I qualify for a 1st mtg. mod and get THEN GET kicked out of any mod. because of the 2nd mod. putting me above the 31%?

[bittersweetme]

What is the link for the NPV test ?

[hope67]

What is the link for the NPV test ?

FDIC: FDIC Loan Modification Program Guide – "Mod in a Box"

Then click "NPV worksheet"

[ama125]

Just finished the NPV test and got a pass. Now I just need to make sure that the #'s are right that I imputed.

I was playing around with the gross income #'s to see what the minimum amount I needed to make each month to get a pass. It was quite a big difference in the payment amount each month.

The reason I did that was I am self employed and Fannie put me on a 3 mo. forbearance at $0 a mo. In order to give me time to increase my monthly income before taxes. And no one could give me an answer of how much of an increase I needed to qualify for a mod.

So now I have a better idea of what my income needs to be to qualify for this program.

However, I know it was mentioned that there is another NPV test for a second mtg. and I do have a 2nd.

My question is:

1. Do they only care about the 1st mtg. being at 31% & not the 2nd?
2. Or will I qualify for a 1st mtg. mod and get THEN GET kicked out of any mod. because of the 2nd mod. putting me above the 31%?

The NPV test is to determine whether or not to modify the 1st mtg., the 2nd has its own preset protocol (modification terms should match those of the first but with an initial interest rate of as low as 1% to step up after year 5 and match whatever the interest rate is of the 1st at that time). As for the 31% DTI, I don't think you would get kicked out. Under the way this is written, it seems that unless they actually combined the two and then did the calculation to 31%, it is likely that your total payment will be over 31% of gross mo income.

[ama125]

Good luck ama125..I hope things will work out for you. Did you try to use different figures as to your taxes to see the impact..do you have an estimate as to what your taxes should be? If so try that figure..

Did they offer you a payment deferral agreement? If not, are you making payments on the loan, or did you stop?

I stopped paying back in March. I was initially offered a forbearance (deferral) agreement. I rejected it though because my husband got a promotion with a 25% pay increase which obviously would change their calculations (and since they have no way of simply just updating our income in the system, we basically had to re-apply).

We had an appraisal done to appeal the taxes so using my county's tax calculator, I was able to estimate what the new taxes will be. I first started toying with the NPV test when I found it on June 1st. At that time, we had no idea what the house was worth so we just plugged in different values (and the same for income, it wasn't until June 8th that my husband got his promotion). Anyway, the first time we ran the test with his then income, our best guess on home value, our then taxes and insurance, and what the Freddie Rate was at that time, we failed (big time...couldn't even compute the results!). So we figured out how much more income was needed to pass and then the promotion came along (still not enough to pass).

Then I called up my insurance company and raised the deductible to lower the monthly payments (only a small difference though and we already had almost every discount you could get). So, then we had the appraisal done (also on June 8) and when that came in, we estimated the new taxes and plugged in all the new data (income, taxes, insurance, and home value)...and we PASSED! BUT that was using the Freddie Rate from way back then. When I use the current Freddie Rate, we FAIL!

Yes, it ****s that I am just sooo close to passing. I feel good though that I have Fannie Mae. The NPV results are not to be used to determine who gets modified and they want a mod pursued even when negative (but within limits). So, long story short, I think I have a good shot at this but there are just so many things hanging this up (oh, and then I also have a 2nd mortgage and the lender was CW on that).

[sandyg]

What does it mean in the last box on the left of the NPV test that says:
Modification terms?
It lists a % difference from the origional paymt.
Then lists Borrower payments after months:
1-108 with each amt. being $141.78

[hope67]

What does it mean in the last box on the left of the NPV test that says:
Modification terms?
It lists a % difference from the origional paymt.
Then lists Borrower payments after months:
1-108 with each amt. being $141.78

As to the % you see, it's basically telling you that your modified payment is lower than your original payment by ___%

As to the payments listed, it's my understanding that your payment amount will stay the same for five years, then the interest rate will go up 1% every year until it reaches the Freddie Mac weekly interest rate for 30 year fixed that was in effect at the time of your modification agreement..

[hope67]

I stopped paying back in March. I was initially offered a forbearance (deferral) agreement. I rejected it though because my husband got a promotion with a 25% pay increase which obviously would change their calculations (and since they have no way of simply just updating our income in the system, we basically had to re-apply).

We had an appraisal done to appeal the taxes so using my county's tax calculator, I was able to estimate what the new taxes will be. I first started toying with the NPV test when I found it on June 1st. At that time, we had no idea what the house was worth so we just plugged in different values (and the same for income, it wasn't until June 8th that my husband got his promotion). Anyway, the first time we ran the test with his then income, our best guess on home value, our then taxes and insurance, and what the Freddie Rate was at that time, we failed (big time...couldn't even compute the results!). So we figured out how much more income was needed to pass and then the promotion came along (still not enough to pass).

Then I called up my insurance company and raised the deductible to lower the monthly payments (only a small difference though and we already had almost every discount you could get). So, then we had the appraisal done (also on June 8) and when that came in, we estimated the new taxes and plugged in all the new data (income, taxes, insurance, and home value)...and we PASSED! BUT that was using the Freddie Rate from way back then. When I use the current Freddie Rate, we FAIL!

Yes, it ****s that I am just sooo close to passing. I feel good though that I have Fannie Mae. The NPV results are not to be used to determine who gets modified and they want a mod pursued even when negative (but within limits). So, long story short, I think I have a good shot at this but there are just so many things hanging this up (oh, and then I also have a 2nd mortgage and the lender was CW on that).

I wish you luck ama125, as you stated I don't think they put too much weight on the NPV test. Are you dealing directly with BOA or are you using Naca?

[ama125]

What does it mean in the last box on the left of the NPV test that says:
Modification terms?
It lists a % difference from the origional paymt.
Then lists Borrower payments after months:
1-108 with each amt. being $141.78

The payments should increase starting at month 60 (which would be after 5 years). Not sure why yours isn't doing that.

[ama125]

I wish you luck ama125, as you stated I don't think they put too much weight on the NPV test. Are you dealing directly with BOA or are you using Naca?

So far just BOA. I know I could speed up the process by going through NACA or emailing OOP (Pres of BOA Home Loans, Barbara Desoer), but I am playing my cards one at a time. I know that when the next rejection comes along, I will have reason to re-apply again when the property taxes get lowered. If that still fails, then I'll send OOP an email and see where that takes me. And if that fails, then I'll go through NACA. I intend to draw this out and maybe use this waiting time to clean up the other debts. I feel the making of a board game coming on...Loan Modificationopoly

[hope67]

So far just BOA. I know I could speed up the process by going through NACA or emailing OOP (Pres of BOA Home Loans, Barbara Desoer), but I am playing my cards one at a time. I know that when the next rejection comes along, I will have reason to re-apply again when the property taxes get lowered. If that still fails, then I'll send OOP an email and see where that takes me. And if that fails, then I'll go through NACA. I intend to draw this out and maybe use this waiting time to clean up the other debts. I feel the making of a board game coming on...Loan Modificationopoly

Hey!! Guess what? Based on the NPV test the more you accumulate of past due interest the higher your chance to pass the test...LOL

[unsettledinpurgatory]

So far just BOA. I know I could speed up the process by going through NACA or emailing OOP (Pres of BOA Home Loans, Barbara Desoer), but I am playing my cards one at a time. I know that when the next rejection comes along, I will have reason to re-apply again when the property taxes get lowered. If that still fails, then I'll send OOP an email and see where that takes me. And if that fails, then I'll go through NACA. I intend to draw this out and maybe use this waiting time to clean up the other debts. I feel the making of a board game coming on...Loan Modificationopoly

ama125 - that is a great idea - Loan Modificationopoly

[sandyg]

Hey!! Guess what? Based on the NPV test the more you accumulate of past due interest the higher your chance to pass the test...LOL

Wow, I passed the NPV as of today so after my 3 mo. forbearance is up at the end of Sept. then I will still pass!!!

[hope67]

Wow, I passed the NPV as of today so after my 3 mo. forbearance is up at the end of Sept. then I will still pass!!!

Yep!

Does your forbearance agreement require you to make payments?

[sandyg]

My forbearance agreement is $0 amt. for 3 mos. But, it can include partial payments at around 50% from what I understand from Fannie Mae's wevsite and from other on this site.

[ama125]

ama125 - that is a great idea - Loan Modificationopoly

It had a different board game idea, but somebody already beat me to it...
ForeclosureOpoly

Call me crazy, but methinks this person is in a financial hardship...who charges $59 to $79 for a board game?!

[ama125]

Wow, I passed the NPV as of today so after my 3 mo. forbearance is up at the end of Sept. then I will still pass!!!

Do you have Fannie Mae as the investor? I was offered the Fannie Mae HomeSaver Forbearance program (it did not lower my payments by much and it was for 6 mo.). Obviously, I rejected that offer.

I just want to caution you, and everyone else, not to get too excited over the NPV results with this FDIC model. We still do not know what values the servicer is actually using and those values are subject to change over time as more trial mods commence. Additionally, unless your loan is backed by Fannie Mae or Freddie Mac, then the servicer is permitted to customize some of the parameters for the test (one of which may include adding 2.5% to the Freddie PMMS rate).

I'm not trying to be pessimistic, but I also don't want to put this information out there and give people false hope. I am only trying to help others understand what the NPV test is and how it is calculated. On the plus side, getting a positive result on this test would mean that you would qualify for that FDIC mod-in-a-box program for IndyMac loans. So in that respect, it is something to gush about. And since the FDIC contributed to the design of the Home Affordable NPV test, we can make a decent assumption that the Home Affordable one may look quite similar.

[sandyg]

Do you have Fannie Mae as the investor? I was offered the Fannie Mae HomeSaver Forbearance program (it did not lower my payments by much and it was for 6 mo.). Obviously, I rejected that offer.

I just want to caution you, and everyone else, not to get too excited over the NPV results with this FDIC model. We still do not know what values the servicer is actually using and those values are subject to change over time as more trial mods commence. Additionally, unless your loan is backed by Fannie Mae or Freddie Mac, then the servicer is permitted to customize some of the parameters for the test (one of which may include adding 2.5% to the Freddie PMMS rate).

I'm not trying to be pessimistic, but I also don't want to put this information out there and give people false hope. I am only trying to help others understand what the NPV test is and how it is calculated. On the plus side, getting a positive result on this test would mean that you would qualify for that FDIC mod-in-a-box program for IndyMac loans. So in that respect, it is something to gush about. And since the FDIC contributed to the design of the Home Affordable NPV test, we can make a decent assumption that the Home Affordable one may look quite similar.

Yes, I do have Fannie. I played around with the gross income #'s and according to what I put in I would still qualify even if we made $500 less each month. But, it it was $400 less it says it would be a 40 year note.

I want to know... what does it take to get the 2% that naca offers for the life of the loan???????????????

[ama125]

Yes, I do have Fannie. I played around with the gross income #'s and according to what I put in I would still qualify even if we made $500 less each month. But, it it was $400 less it says it would be a 40 year note.

I want to know... what does it take to get the 2% that naca offers for the life of the loan???????????????

That's encouraging news...so no principal forbearance? All sounds very good. I for one will be checking my trial payments (if ever they come ) against this FDIC NPV model and see how accurate it is.

As for the NACA 2% fixed, I wonder how many people went that route after being dragged through the mud trying to work with BofA alone first? It's like some kind of hazing ritual (first you must talk to the call center in India, then we'll string you along with false statements, we'll make you a crappy offer, etc, etc). I think once you demonstrate that you are not just going to walk away, only then can you achieve the coveted 2% fixed rate and only if you are going through NACA to do so.

[sandyg]

That's encouraging news...so no principal forbearance? All sounds very good. I for one will be checking my trial payments (if ever they come ) against this FDIC NPV model and see how accurate it is.

As for the NACA 2% fixed, I wonder how many people went that route after being dragged through the mud trying to work with BofA alone first? It's like some kind of hazing ritual (first you must talk to the call center in India, then we'll string you along with false statements, we'll make you a crappy offer, etc, etc). I think once you demonstrate that you are not just going to walk away, only then can you achieve the coveted 2% fixed rate and only if you are going through NACA to do so.

You know I don't quite understand exactly where you see the principal forbearance. But I am assuming this is it!!!!!!!!

It does say on the amortrization schedule that there is a negative $46,000+. So here it is the first couple of payments. so is this the p. forbearance.

And after the 96th payment it looks like it goes away on the schedule.

<TABLE style="WIDTH: 440pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=586 border=0><COLGROUP><COL style="WIDTH: 48pt" width=64><COL style="WIDTH: 82pt; mso-width-source: userset; mso-width-alt: 3986" width=109><COL style="WIDTH: 112pt; mso-width-source: userset; mso-width-alt: 5449" width=149><COL style="WIDTH: 85pt; mso-width-source: userset; mso-width-alt: 4132" width=113><COL style="WIDTH: 113pt; mso-width-source: userset; mso-width-alt: 5522" width=151><TBODY><TR style="HEIGHT: 12.75pt" height=17><TD class=xl80 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 130pt; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent; mso-ignore: colspan" width=173 colSpan=2 height=17>Modification scenario</TD><TD class=xl82 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 112pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=149></TD><TD class=xl81 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 85pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=113></TD><TD class=xl80 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 113pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=151></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl72 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent; mso-ignore: colspan" colSpan=4 height=17>Principal forbearance - reduce UPB by forebear amount</TD><TD class=xl72 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl72 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" height=17></TD><TD class=xl73 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD><TD class=xl74 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent">rate</TD><TD class=xl73 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent">term </TD><TD class=xl72 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" height=17></TD><TD class=xl75 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD><TD class=xl76 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>2.4662%</TD><TD class=xl83 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>324</TD><TD style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD></TR><TR style="HEIGHT: 25.5pt" height=34><TD class=xl77 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 25.5pt; BACKGROUND-COLOR: transparent" height=34>month </TD><TD class=xl87 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 82pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=109>cashflow </TD><TD class=xl86 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; WIDTH: 112pt; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" width=149>UPB adjusted for principal forbearance</TD><TD class=xl75 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent">Rate </TD><TD class=xl77 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent">NPV </TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl71 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" height=17></TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD><TD class=xl79 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD><TD class=xl75 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl71 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" align=right height=17>0</TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>($338,748.29)</TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>$338,748.29 </TD><TD class=xl79 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>0.21%</TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>($46,444.63)</TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl71 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" align=right height=17>1</TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>$1,433.00 </TD><TD class=xl75 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent">$ 338,011.48 </TD><TD class=xl79 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>0.21%</TD><TD class=xl75 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent"></TD></TR><TR style="HEIGHT: 12.75pt" height=17><TD class=xl71 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; HEIGHT: 12.75pt; BACKGROUND-COLOR: transparent" align=right height=17>2</TD><TD class=xl78 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>$1,433.00 </TD><TD class=xl75 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent">$ 337,273.16 </TD><TD class=xl79 style="BORDER-RIGHT: #f0f0f0; BORDER-TOP: #f0f0f0; BORDER-LEFT: #f0f0f0; BORDER-BOTTOM: #f0f0f0; BACKGROUND-COLOR: transparent" align=right>0.21%</TD></TR></TBODY></TABLE>

[ama125]

You know I don't quite understand exactly where you see the principal forbearance. But I am assuming this is it!!!!!!!!

Click on the tab for "test scenario". Principal forbearance is cell E16.

[ama125]

Hey!! Guess what? Based on the NPV test the more you accumulate of past due interest the higher your chance to pass the test...LOL

hope67 - are you referring to changing the "months past due" (cell B16) and the results it has on "benefit from modification" (cell E29)? Sure that number goes up the more months you are behind but note that if what you are seeing is a number that is red in parentheses, this is a NEGATIVE number. So, if that number went from 300 to 600, that means it is actually MORE negative the later you are in payments. To get a pass, this number must be greater than zero. Anything in red is less than zero. OUCH...that one hurts me

You know what else stinks, if I use my estimated taxes and the current Freddie rate of 5.2%, I fail (by a mere $712). If the Freddie rate is 5.1%, I pass by $598. But of course, unless they use my estimated taxes for the escrow analysis, I may be stuck waiting until October and who knows what the Freddie rate will be then (but I'll be a good 8 months late by that point). And of course, I am basing this on my appraised value (they'll use some automated model to determine that). So, I think I'm done playing with the NPV for now. I am literally right on the fence it would seem. I'd like to think if I'm that close, they'd still give it to me!

[hope67]

hope67 - are you referring to changing the "months past due" (cell B16) and the results it has on "benefit from modification" (cell E29)? Sure that number goes up the more months you are behind but note that if what you are seeing is a number that is red in parentheses, this is a NEGATIVE number. So, if that number went from 300 to 600, that means it is actually MORE negative the later you are in payments. To get a pass, this number must be greater than zero. Anything in red is less than zero. OUCH...that one hurts me

You know what else stinks, if I use my estimated taxes and the current Freddie rate of 5.2%, I fail (by a mere $712). If the Freddie rate is 5.1%, I pass by $598. But of course, unless they use my estimated taxes for the escrow analysis, I may be stuck waiting until October and who knows what the Freddie rate will be then (but I'll be a good 8 months late by that point). And of course, I am basing this on my appraised value (they'll use some automated model to determine that). So, I think I'm done playing with the NPV for now. I am literally right on the fence it would seem. I'd like to think if I'm that close, they'd still give it to me!

ama125, I know the red number between parentheses is negative (I'm a retired accountant) , in my case it is a plus anyway. However, since my payment includes escrow, I decided to adjust the past due amount reflected on B22 to include past due escrow amount as well (the note next to the field says that we can adjust that field), when I increased that amount the "benefit from modification" E29 went up . I'm not sure if they will include the past due escrow amount or not, but it is reasonable to assume they would. I would think the lender must be paying the property tax and insurance. I might be wrong.

Don't give up, I think you have a good chance getting the modification, as you stated, the NPV is not an important factor in their evaluation process.

[hope67]

Fannie Mae guidelines:

Q37. Can the HAMP modification be pursued if the NPV result is negative?

For a Fannie Mae loan, the HAMP modification should be pursued on a loan where the NPV result is negative. However, when the NPV is negative, any principal forbearance amount may not reduce
the interest-bearing principal to less than 100 percent of the mark-to-market loan-to-value (LTV) ratio

So according to this, there is only one situation where the NPV negative result can hurt: If the amount of the principal forbearance would reduce the LTV to the point of creating equity.

[ama125]

ama125, I know the red number between parentheses is negative (I'm a retired accountant) , in my case it is a plus anyway. However, since my payment includes escrow, I decided to adjust the past due amount reflected on B22 to include past due escrow amount as well (the note next to the field says that we can adjust that field), when I increased that amount the "benefit from modification" E29 went up . I'm not sure if they will include the past due escrow amount or not, but it is reasonable to assume they would. I would think the lender must be paying the property tax and insurance. I might be wrong.

Don't give up, I think you have a good chance getting the modification, as you stated, the NPV is not an important factor in their evaluation process.

So, I'm preaching to the choir, huh? Do you currently have an escrow account? I do so I'm not sure how that comes into play, but as I understand, everything I paid into last year covers this year. So everything I haven't paid (the past due amount) should get tacked back on to my payments, right? I think you are right to assume they would. I'll have to try what you did and see how that effects things. I'm not a big fan of math but I sure have had to brush off my skills for this (and my knowledge of excel). They should give the borrower a discount for going to such great lengths to decipher their calculations!

[hope67]

So, I'm preaching to the choir, huh? Do you currently have an escrow account? I do so I'm not sure how that comes into play, but as I understand, everything I paid into last year covers this year. So everything I haven't paid (the past due amount) should get tacked back on to my payments, right? I think you are right to assume they would. I'll have to try what you did and see how that effects things. I'm not a big fan of math but I sure have had to brush off my skills for this (and my knowledge of excel). They should give the borrower a discount for going to such great lengths to decipher their calculations!

I agree we all deserve a discount going thru this.

Yes, I do have an escrow account which is part of my payment. So I multiplied the escrow amount by the number of past due months and added it to the amount in b22. Anyway their guidelines state they will modify a loan even if the NPV is negative as long as the needed principal forbearance would not create equity. Did your modification scenario required a principal forbearance?

[ama125]

Fannie Mae guidelines:

Q37. Can the HAMP modification be pursued if the NPV result is negative?

For a Fannie Mae loan, the HAMP modification should be pursued on a loan where the NPV result is negative. However, when the NPV is negative, any principal forbearance amount may not reduce
the interest-bearing principal to less than 100 percent of the mark-to-market loan-to-value (LTV) ratio

So according to this, there is only one situation where the NPV negative result can hurt: If the amount of the principal forbearance would reduce the LTV to the point of creating equity.

Exactly! I was trying to understand that the other day (I posted an example here: http://www.loansafe.org/forum/countr...tml#post108635). From what I posted, does that sound right to you? Now here's another question, when they compute your LTV, will they take into consideration the amount on the 2nd mtg? I mean, I would think they should, but will they? In any case, when I run my numbers, it does not calculate any principal forbearance (but only when I use my estimated lowered taxes). I pay a lot in taxes. The formula for the modified payment takes the income x .31 and compares that value to the amount in taxes and insurance. If little is left to pay towards principal and interest, that will kick in tier 3 to forbear principal. In my case, my current taxes and insurance drive the formula to compute forbearance. But with the lowered taxes, it does not. Just further confirming I have to wait until October. Maybe I will call the appeals court and see if they can make my outcome available sooner.

[hope67]

Exactly! I was trying to understand that the other day (I posted an example here: http://www.loansafe.org/forum/countr...tml#post108635). From what I posted, does that sound right to you? Now here's another question, when they compute your LTV, will they take into consideration the amount on the 2nd mtg? I mean, I would think they should, but will they? In any case, when I run my numbers, it does not calculate any principal forbearance (but only when I use my estimated lowered taxes). I pay a lot in taxes. The formula for the modified payment takes the income x .31 and compares that value to the amount in taxes and insurance. If little is left to pay towards principal and interest, that will kick in tier 3 to forbear principal. In my case, my current taxes and insurance drive the formula to compute forbearance. But with the lowered taxes, it does not. Just further confirming I have to wait until October. Maybe I will call the appeals court and see if they can make my outcome available sooner.

You're absolutely right in your example.

IMO, they do not and should not include the 2nd mortgage when determining the LTV for the purpose of the NPV test. This is done strictly to determine the benefit of modifying the 1st mortgage. But again I could be wrong!

[hope67]

BTW, when calculating LTV, make sure to use the adjusted unpaid balance which includes accrued interest and escrow.

[ama125]

BTW, when calculating LTV, make sure to use the adjusted unpaid balance which includes accrued interest and escrow.

Gotcha! Thanks! I will try that and see what I come up with. I think I'll just add a cell in the NPV test to calculate this.

[ama125]

You're absolutely right in your example.

IMO, they do not and should not include the 2nd mortgage when determining the LTV for the purpose of the NPV test. This is done strictly to determine the benefit of modifying the 1st mortgage. But again I could be wrong!

My 2nd mortgage was taken out to purchase the home so it was not a HELOC. That is the only reason I mentioned it. If I calculate LTV using only the 1st mtg, it would show that the house is worth more than I owe (I have equity). But, if I calculate LTV based on the combined mortgages, than I owe more than the house is worth (now I am underwater).

If you consider what the house would sell for in my foreclosure scenario, the lender on the first would not make back their entire investment and nothing would be left to the lender on the second mtg. Second mortgages may be extinguished by a preset protocol (but can't be more than 180 days past due). I'm getting awfully close to that cut-off point. I am trying to find out if the NPV calculations could be used in bankruptcy court as grounds for a cram down (stripping the lien) on the 2nd mortgage since according to their own calculations, nothing would be left to go to the holder on the junior lien. So far, I have been told that those results are not to be disclosed to the borrower. My friend who is a BK attorney thinks that those records could be provided if court ordered but was unsure if this would work out or not. I'll keep digging!

[Skipper]

Fannie Mae guidelines:

Q37. Can the HAMP modification be pursued if the NPV result is negative?

For a Fannie Mae loan, the HAMP modification should be pursued on a loan where the NPV result is negative. However, when the NPV is negative, any principal forbearance amount may not reduce
the interest-bearing principal to less than 100 percent of the mark-to-market loan-to-value (LTV) ratio

So according to this, there is only one situation where the NPV negative result can hurt: If the amount of the principal forbearance would reduce the LTV to the point of creating equity.

Good morning all,

Below are the Freddie Mac guidelines:

■ If the result of the NPV test is negative, the Servicer must modify the Mortgage, unless the Mark-to-
Market LTV Ratio is less than 100% and principal is being forbeared. If principal forbearance is
needed to achieve a Target Payment and the resulting Mark-to-Market LTV Ratio would fall below
100%, then the Borrower is not eligible for a modification under this Program, except as set forth in
Section C65.7(c), and the Servicer should review the Borrower for other foreclosure alternatives.

I hope this helps...

Skipper

[hope67]

My 2nd mortgage was taken out to purchase the home so it was not a HELOC. That is the only reason I mentioned it. If I calculate LTV using only the 1st mtg, it would show that the house is worth more than I owe (I have equity). But, if I calculate LTV based on the combined mortgages, than I owe more than the house is worth (now I am underwater).

If you consider what the house would sell for in my foreclosure scenario, the lender on the first would not make back their entire investment and nothing would be left to the lender on the second mtg. Second mortgages may be extinguished by a preset protocol (but can't be more than 180 days past due). I'm getting awfully close to that cut-off point. I am trying to find out if the NPV calculations could be used in bankruptcy court as grounds for a cram down (stripping the lien) on the 2nd mortgage since according to their own calculations, nothing would be left to go to the holder on the junior lien. So far, I have been told that those results are not to be disclosed to the borrower. My friend who is a BK attorney thinks that those records could be provided if court ordered but was unsure if this would work out or not. I'll keep digging!

I understand your point but I still think that for the purpose of the loan modification of the 1st mortgage they do not include the 2nd mortg in their LTV calculation. The first loan is called "first" because it is in first place, the existence of a 2nd loan has no bearing at all on the weakness/strength of the status of the 1st loan.

Let's ask ourselves this question, why is it important to them that the LTV is not below 100% in case where there is principal forbearance and negative NPV? What's their concern?

IMO, because it would be an indication to them that foreclosure would be a better alternative since the principal forbearance needed to modify the loan created equity. To give the 1st mortgage holder an accurate idea as to forclosure vs modification, the LTV calculations should only include the 1st mortg. This is just my opinion.

[ama125]

Good morning all,

Below are the Freddie Mac guidelines:

■ If the result of the NPV test is negative, the Servicer must modify the Mortgage, unless the Mark-to-
Market LTV Ratio is less than 100% and principal is being forbeared. If principal forbearance is
needed to achieve a Target Payment and the resulting Mark-to-Market LTV Ratio would fall below
100%, then the Borrower is not eligible for a modification under this Program, except as set forth in
Section C65.7(c), and the Servicer should review the Borrower for other foreclosure alternatives.

I hope this helps...

Skipper

So as far as Fannie Mae and Freddie Mac backed loans, they appear to be playing by the same set of rules (as I would suspect they should be). And of course, the "foreclosure alternatives" are 1. a modification other than HAMP, 2. short-sale, or 3. deed-in-lieu of foreclosure. Oh how splendid! Two of the three result in the borrower losing their home! Unless we see the "rental option" going into effect in which the borrower loses ownership of the home but gets to rent it back from the bank. There has been talk of this so we shall see what comes of it. I suppose if my only option is losing the home and I would likely have no other choice but to rent (because how would I ever get another mortgage so soon after this mess), then I'd choose to stay in it and not incur the cost of moving. I know, it is like pouring salt on the wound, but I absolutely hate the thought of packing and moving!

[Skipper]

So as far as Fannie Mae and Freddie Mac backed loans, they appear to be playing by the same set of rules (as I would suspect they should be). And of course, the "foreclosure alternatives" are 1. a modification other than HAMP, 2. short-sale, or 3. deed-in-lieu of foreclosure. Oh how splendid! Two of the three result in the borrower losing their home! Unless we see the "rental option" going into effect in which the borrower loses ownership of the home but gets to rent it back from the bank. There has been talk of this so we shall see what comes of it. I suppose if my only option is losing the home and I would likely have no other choice but to rent (because how would I ever get another mortgage so soon after this mess), then I'd choose to stay in it and not incur the cost of moving. I know, it is like pouring salt on the wound, but I absolutely hate the thought of packing and moving!

Ama,

I truly wish you luck!

Skipper

[ama125]

Ama,

I truly wish you luck!

Skipper

Thanks, Skipper! Right back at ya!