Home Loans and Support

Denial by Fannie Mae due to negative NPV

Discussion in 'Loan Modification' started by bigislander, Jun 9, 2010.

  1. bigislander

    bigislander LoanSafe Member

    I want to make a topic to collect info about negative NVP HAMP denials for Fannie Mae owned loans (or those loans that go by the same guidelines). I've posted my story on some other topics. I don't need this topic to be about my story, just about dealing with Fannie Mae over NVP.

    I found some information about next steps when you get denied:
    If you are not approved because you failed NPV, the servicer is obliged to tell you the following:
    what NPV means
    the input factors used for your NPV
    the date NPV was completed
    Servicer must tell you of your rights, and you have 30 days to request the information. You may verbally request the information (but good luck.) They must answer your written request within 10 days. Note: be sure to make the written request, even if you manage to get information over the phone.

    If a foreclosure sale is scheduled they may not complete the sale until 30 days after they send you the values.

    You have 30 days in which to challenge certain parts of the NPV for "material" inaccuracies. The letter you get will state examples and lists 15 NPV inputs that are available.

    If the NPV can be shown to be inaccurate, they will conduct a new one, but there is no guarantee that will result in approval. (Comment: DUH)
    The servicer must come up with an accurate NPV before any foreclosure sale, if you follow the protocol.

    Here are a few excerpts from Fannie Mae guidelines re NPV.
    My note: If your property value actually goes up, it shouldn't work against you. If your property value goes down during the trial, you won't get the benefit.

    I look forward to seeing some discussion on how this is working for people. This is not everything from the guidelines. It's what I had made note of and could find so as to get the topic going.

    My servicer went ahead and initiated the foreclosure process immediately upon my denial, so I intend to write them and site from Announcement 9/31:
    I did call them on it, but got a 'does not compute' response. They think they are not supposed to hold a foreclosure sale until they eliminate other options, but that they can move the process along so that they're ready to go if the options fail. What I see is that they are not to go any further with the process until they've explored the workout hierarchy.

    Anyone read that differently?
  2. Maurice Bedard

    Maurice Bedard Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    That was a great post! Thanks for sharing the information with community in such a structured way.

    Here is the argument that I keep bringing up when it comes to the home affordable modification program or the making home affordable program. There are lot of words in the guidelines that say "must" , "have to" etc. But what I do not see is " if you do not comply"," you will be fined"," you can be sued"," here are the consequences" " if you do not follow these guidelines we will do this to you".

    I do not seen any of this wording or anything relating to the fact that if they do not follow these guidelines then what? They are probably like, so and what ya gonna do about it? They do not say that, but one can only guess that if there is no law or penalties for not following the guidelines then they're not going to follow them.

    Can anyone show me what happens if they do not follow these guidelines?
  3. bigislander

    bigislander LoanSafe Member

    Thank you for the compliment, Moe!
    I'm a newbie at wading through the guidelines. I put off knowing until I got my permanent mod revoked -- darn it if that didn't mess up my trust in HAMP.
    Your point is rock solid. No teeth. I don't know how to get teeth, but I'm thinking a start is for people to recognize guideline violations, put it in writing and cc. Fannie Mae and the Treasury Dept., write to media and Congressional reps?

    The "teeth" that I have seen in place is not a legal penalty but economic interests. They can lose their eligibility to earn incentives and participate in HAMP if they violate the guidelines. What it would take for a big bank to lose its privileges, I can't say.

    In a better world, they would make an effort not to violate guidelines, or at least to fix it when they're called on it -- and would play nice with the program if they want to play.
  4. redroad

    redroad LoanSafe Member

    Moe With all do respect I appreciate the web site and the part about not blowing smoke. I can tell you this if it was not for the folks willing to push back against the servicers for not following the servicer guidelines you wouldn't have a web site.

    As far as show you. who do you think affected change on the very thing bigislander is mentioning with the request for the NPV test result. Just a few months ago they didn't have to provide those results. Servicers would just tell you were NPV negative and you would have to take their word on it. It was people on this site and across the country who challenged "adverse action" who got that change. What significance does it have? Well if the servicer made a mistake in the test at least you have something to challenge them on.

    For every person on this site that has been in a long term battle with a servicer who has educated themselves as to what the servicer is required to do and what they themselves were required to do has at the very least given themselves a way to fight another day and if it should come down to a foreclosure court at the very least you can show you complied and tried to remedy the situation every way you could. Where the servicer did not.

    JUDGING INDYMAC ? New York Supreme Court Judge Finds IndyMac?s behavior ?repugnant, shocking, repulsive and completely devoid of good faith?. - Mandelman Matters

    So to answer your question:

    What happens is you get to have a web site and thousands of people by sharing with each other get to find what ever little bit of information they can to understand the battle there in with there servicer and how they can fight losing their home.

    I hope you can appreciate I don't like to blow smoke either.
  5. bigislander

    bigislander LoanSafe Member

    Inspiring, redroad, truly.
    I made a new term for loan mod yesterday. (maybe it's around, but it's new to me.)


    We need more modifictions to become reality. Enough with the stories.
  6. MyHAMP

    MyHAMP LoanSafe Member

    We still have to figure out when that is actually considered to be the case.:D
    I'm still confident it's the time when both parties have signed the permanent agreement. Hopefully, I'm not mistaken. Let's see what the attorney says. Only one week to go..;)
  7. bigislander

    bigislander LoanSafe Member

    Looking forward to hearing your news, MH!

    I want to stay with the NPV subject focus in this topic, but as part of that I want to compile addresses to c.c. when writing the servicer about broken guidelines.
    I found these online, anyone tried them:

    Department of Treasury
    Chief of Treasury’s Homeownership Preservation Office
    Department of the Treasury 
1500 Pennsylvania Avenue, NW 
Washington, D.C. 20220

    Fannie Mae Resource Center at 1-800-732-6643

    MHA Compliance
  8. redroad

    redroad LoanSafe Member

    This is the guy we need an email address or snail mail address:
    Terry Edwards
    Executive Vice President
    Credit Portfolio Management

    About Fannie Mae: Executives > Terry Edwards

    If there is anybody out there that knows please post back.
  9. Maurice Bedard

    Maurice Bedard Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    I have all the problems listed above. The problem came when the servicer ran the second NPv when my income was slightly different from what was verbally given 8 months earlier. I should be judged under the old rules per that 09-31 update. It says that only for loans with an "initial" NPV after 12-1 is it to be used to disqualify. When they reran the NPV in December based on documented income I had supplied 4 months earlier, the NPV was negative, and they diregarded the directive about the initial NPV. The variation in income was only ten percent and I still qualified. After complaining, instead of correcting the mistake, they put me through the process again, in March without my knowledge. That time they ran the NPV again but used updated tax information, my property taxes had gone up. Now they said I didn't qualify because since the NPV was negative, and I didn't qualify due to forbearance that was now necessary due to the tax increase. The forbearance would have amounted to about $2800, and any thing over $0 is excessive. If they had done it right in December, no forbearance would have been needed, I would have just gotten an escrow payment increase this year.

    If they had properly performed the modification in the first place, the negative NPV in December should not have made a difference since the initial NPV was supposed to have been done in August.

    No one I have talked to at HOPEnow, or fannie mae has any idea what the directives are. Fannie rep told me yesterday that servicers don't even have to follow the fannie directives on loans fannie owns. She kept repeating, when I asked why fannie directives didn't need to be followed, "they are the servicers, they make the decision." She had no clue about any of the directives and did not care. She said that sometimes the servicer will move more quickly after fannie contacts them but they(the servicers) don't have to do anything.

    Then there is the matter of notifying the borrower. I have still not received any notice despite asking. I have been given multiple reasons verbally as to the reason for the denial. I know they have inputs wrong- at the minimum they have my house overvalued by more than enough to change everything.

    I am just about ready to drop this and go through with the BK and get rid of the $42k I owe Wells Fargo. That is actually their money, they own that loan so they will be eating all of that. If they had modified my first mtg, I would have modified the second, and filed a ch 7 BK instead of a 13. I am giving them until the second forecloses to see if they want to do things the way that they really make more money.

    In other words- don't get me started on talking about NPV
  10. redroad

    redroad LoanSafe Member

    I think it's a matter of getting through to a 2nd tier individual to get a rational answer from Fannie. I have had to bypass the HAMP option by simply not selecting any option when asked to choose in order to accomplish that.

    With your case menace I feel if you get the opportunity to break through to someone you can make your case you will be home free. Hopefully this thread will turn up some good contact email addresses or numbers so you can do that.
  11. redroad

    redroad LoanSafe Member

    Hey bigislander any news today?
  12. bigislander

    bigislander LoanSafe Member

    No news that came to me. I am waiting until Friday to call the servicer HAMP team manager, as that was the outside date I got.
    Today I played good girl and followed the paths that I felt obligated to try, if only to be able to say I had done it.

    First I called the FM Resource Center (# above). They do not have access to the file. They told me to wait to hear from the servicer, and kept asking if I have called HUD's HOPE. I do have the number of the FM "angel" that was posted, but I don't feel like I can contact a higher-up if I haven't proved to myself that the lower echelon can't help me.

    Haven't been helped by HOPE in the past, but both my letter from GT and FM say to call them, so I do. After communicating to intake, I get a housing counselor. After establishing that I'm on the other side of an approved HAMP mod and have a sale date set, they transferred me to the Escalation Dept.

    This is a new place for me, and the specialist is surprisingly helpful. She makes detailed notes and listens to everything. She agrees that a signed off permanent mod should be final; however, when I tell her that FM is my investor and is not approving due to NPV, she says "oh boy."

    I was very pro-active with this call and insisted on explaining all 3 or 4 problem areas before we go to the next step, calling the servicer. I propose that because my initial NPV was run prior to Dec. 1, 2009, but for another bank (National City), that Green Tree may not have tied that in. GT ran my first one after Dec. 1st. The question is, does any HAMP NPV test count in establishing that initial NPV, or is that canceled out when one is denied and reapplies.

    Next step: call servicer. Servicer is closed for the day. So, I have the Dept # and I will call tomorrow, but first I'll call the HAMP team for an update.

    Note: she told me that if they did switch to in-house, there should not be another trial period, that it is NOT required, which is not what GT told me.
  13. redroad

    redroad LoanSafe Member

    This is the big question for you and others who have been denied based on a negative NPV test. A test which had been conducted prior to the new rules where the results of the test must be made available. What are your current thoughts on this?

    Post back. Hope all is well with you.
  14. bigislander

    bigislander LoanSafe Member

    I was able to speak to the HAMP team leader who is personally working on my file and checking on it every day. Fannie Mae has still not made a decision, but he says he feels good about it. He said looks more like middle of next week.

    I did ask him about the "initial" evaluation, and he looked at it as the beginning of this application go round. After thinking about it for a minute, he sort of saw my point. He wants it to work, so I do believe if it were a good point in my favor he would be interested. He said he'd look into it.

    I don't know if the HAMP teams get paid incentives on what they get passed, but that specific part of the lender machinery I have found nice people who are focused on success with the process. Most or all didn't work for this bank a year ago, and were hired when HAMP was created. I mention this because I don't believe they want to ignore points in my favor. If they don't get incentives, I'm sure their team performance is evaluated by their wins.

    Much as I dislike waiting around, I think I have to wait out this phase before taking other steps. If they can get it back into HAMP and made permanent by FM, that's better than fighting with them over the signed agreement that is not kosher with FM.

    If FM rejects it, then I will ask why the Alt is not an option. They keep saying the only other option is in-house.

    I do understand their psychology. They are following up on something they think has a high chance of success. They don't want to talk about "what ifs" at this time. They don't have a lot of manpower. I am the one who wants answers on what ifs so that I can sleep at night.
  15. redroad

    redroad LoanSafe Member

    It's such a fight isn't it. Trying to stay one step ahead until we can put our lives on a path that doesn't tax so much of our reserve energy. My wife and I got the garden planted this year and the Osprey down at the river have their chicks already. I refuse to give the bank everything! Although there have been days I feel I have given them way to much. There are many here who if this mortgage doesn't work for them they will never get another chance to own a house including us. I think the banks know this on some level. I feel much more at peace with it all now because we fought until we became financially solvent enough that we might be able to cure the default if they deny us the HAMP. What a grunt that was. We fight on. Hope all works out for you.
  16. roseabella

    roseabella LoanSafe Member

    Same as you -- Problem with NPV and denied HAMP. However, am going to receive Alt Mod with just as good terms. Are they considering you for a Fannie Mae Alt Mod? As of March 2010, loas invested in by Fannie Mae should be automatically considered for an Alternative Modification within 10 days of being denied a HAMP. No one knew about this when I called the HAMP team at CitiMortgage (however, some pretended to), and I called every day (sometime 4-5 times per day until I got a rep who knew more than the script) and I called every day until I finally got a knowledgeable rep. Many thought the Fannie Me Alt Mod was the traditional mod even though it is not. I even called the HOPE line and was referred to a counselor who said the same thing. Anyway on the 8th day after denial, I was called out of the blue by a CitiMortgage rep (who is my new best friend) stating that I was being considered for an Alt Mod (Hope reigns eternal!). My wonderful rep answered all of my questions and helped ease my heart out of my throat. I was apporved for my Alt Mod within 7-10 days after the initial call (I had to turn in some more info or it would have been sooner). When I log on to Citi, it now says all my mod documents have been received and to make payments according to the details of the new agreement! My new best friend says that I should book with the new terms by the end of the month. I can breathe again...God Bless.
  17. redroad

    redroad LoanSafe Member

    Have you read this? It seems clear as to how retests should be conducted.

  18. redroad

    redroad LoanSafe Member

    This also from Announcement SVC-2010-03 Page 10:

    This seems to imply that there is a period of time during "active" status if versioning requirements were not followed and the servicer did cancel or did schedule cancellation that the servicer would be in non-compliance. Right?
  19. Maurice Bedard

    Maurice Bedard Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    Retesting due to versioning requirements is a little different from the situation where prior to 12-1-09 it was OK to be negative NPV. I think big islander is trying to determine if the initial negative NPV that was done prior to 12-1-09 still allows for eligibility even on a resubmission for HAMP. The directives don't make any distinction between whether "initial" is for each submission, or if "initial" applies once to each loan.

    I found out on Friday that I was originally denied for HAMP due to a second(final) NPV test that was negative even though my initial NPV test was prior to 12-1-09. I am sure the initial NPV was negative too, but at that time last August it didn't matter.Probably a lot of non- compliance, but what can you do about it?

    When I started trying to straighten out the problem, instead of just ignoring the negative NPV as the directives state, they reran my complete eligibility, and of course, under the new rules a negative NPV disqualifies you.

    It is so hard to explain, reps are all clueless, don't understand at all about the significance of when your "initial" NPV test occurred, and not a single rep I have talked to has had the directives available to discuss.

    The situation is a little different for those who have been re-tested and the NPV went from a positive to a negative. That is why I have tried to warn people to make sure all the information they supply remains consistent. As long as that happens, the results shouldn't change. I think it is possible that banks are actually continually asking for updated information just so they can rerun the test to see if you fail.

    if your income increases at all, it may be enough to make you fail the NPV. I found this out by playing with the FDIC NPv sample. Same goes for a desrease, but most people are more wooried and try to show an increase in income.

    From redroad-

    ""This seems to imply that there is a period of time during "active" status if versioning requirements were not followed and the servicer did cancel or did schedule cancellation that the servicer would be in non-compliance. Right?<!-- google_ad_section_end --> ""

    From what I have read is that there are/were different versions of the NPV test available and servicers were using one version for the initial NPV test and then using a later version. The servicer is now required to use the same version throughout the process, and if any mods were cancelled due to the use of multiple versions of the NPV, those cancelled mods were to be retested using the correct version of the NPV test. Another "hard to explain" or at least hard for me to explain.
  20. redroad

    redroad LoanSafe Member

    Hey menace, To make it even more confusing go to this link and then scroll to NPV test and Retrieving and Interpreting the NPV Test Results Last Updated: February 25, 2010. There they are still saying that Fannie Mae loans that are NPV negative You must proceed with
    the modification.

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