To Loan Mod or Not is a Business Decision based on Net Present Value (NPV)

I remember having this discussion with a banker at Real Estate Blogging
event about 4 years ago, saying the banks should publicize their
spreadsheets for determine an accept or reject calculation based on NPV.
Back then short sales succeeded about 20% of the time unlike the 60% success
rate of today. If you know you'll get a reject, you won't waste your time
asking for a loan mod.

It was interesting to see this headline today at DS news:



<http://dsnews.us1.list-manage2.com/track/click?u=59816bad6939d5a7dd87e45a5&
id=5577ad8b05&e=ebe71b748c
> Treasury Unveils Do-It-Yourself NPV Assessment


Treasury has launched a Web-based tool that allows homeowners themselves to
conduct a net present value (NPV) assessment of their mortgage. Under the
Home Affordable Modification Program (HAMP), servicers perform an NPV test
to determine if modification is a more financially sound route to take than
allowing the loan to proceed to foreclosure. Treasury is encouraging both
homeowners who have been denied a HAMP mod and those considering applying
for the program to use the new online calculator and share the results with
their servicer.
<http://dsnews.us1.list-manage.com/track/click?u=59816bad6939d5a7dd87e45a5&i
d=6c85029cc6&e=ebe71b748c
> > Read More

-sunil


SUNIL SETHI REAL ESTATE

Sunil Sethi / Broker, President, REALTOR, MBA, CPA (inactive)
38750 Paseo Padre Pkwy Suite B3 / Fremont, CA 94536
Cell 510 388 2436 / Fax 510 431 9046

www.sunilsethi.com <http://www.sunilsethi.com/>

CA DRE#: 01173766