I'm hearing a lot about NPV tests that fail. Are there cases when the bank actually allows one to pass?
Let's say a mortgage is $100K more than the fair market value. Is it more favorable to have less equity and a steady income?
I don't know how they predict the probability of foreclosure if the payment was affordable. Without fully understanding this NPV calculation, how can borrowers challenge the figures? It is a complicated calculation.
At first glance, I would think that I would qualify for HAMP, but then when it comes to NPV calculation, they seem to have enough leeway to make any NPV test fail.