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:

> 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.
> > Read More



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 <>

CA DRE#: 01173766