PHH Servicer - HAMP denied second time =>

[EastCoaster]

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.PHH received my request for HAMP in the begining of August. I've been denied twice so far.

This time for "Failed NPV test due to large forbearance". Keep in mind this was over the phone. I don't have a formal letter explaining the reason for denial.

IMO I'm failing the NPV because I'm not upside down with the first mortgage. As far as I know, a HELOC is not part of the NPV formula.

First Mortgage balance: 250k

Estimated home value (my estimate based on recent sales data): 400K to 425k (may even be higher). I do not know what PHH entered as a current value.

HELOC: 150k (not considered in NPV formula)

So, is my equity killing my chances of HAMP ?

Also, I'm not behind on payments, just late the past few.

My monthly payments are not affordable at our current income.

Any suggestions ?

Input please.
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[Moe Bedard]

My thoughts are your equity is fine because there is very little or none.

I think you rare getting denied for this:

Also, I'm not behind on payments, just late the past few.

This seemed to be the reoccurring trait of denials under the HA MP.

[MyHAMP]

Originally Posted by Moe Bedard

My thoughts are your equity is fine because there is very little or none.

That's something I don't get. The NPV obviously doesn't care what the HELOC or second mortgage is. Now if the first is only 250K and the property value is $400K or even more, why is there no equity in regards to the NPV for the first mortgage?

If the loan goes into foreclosure, the lender wouldn't lose any money. I don't know if the lender would be better off under a HAMP-modification.

To me, that sounds like a NPV-killer - or what am I missing here?

[EastCoaster]

UPDATE:

Re-submitted over the phone with "more" monthly gross income.

I'm now "passing" the NPV test, so we'll see what the answer is this time.

[MyHAMP]

Originally Posted by EastCoaster

UPDATE:

Re-submitted over the phone with "more" monthly gross income.

I'm now "passing" the NPV test, so we'll see what the answer is this time.

That's quite possible if you consider why - according to them - you didn't pass the initial NPV:

"Failed NPV test due to large forbearance" also meant that your income was insufficient to pay off the $250K at 2% APR over 40 years with 31% of your gross income, meaning they also had to forbear an obviously big part of the $250K - and since the part that goes into forbearance doesn't bear any interest...you couldn't score enough points for the NPV.