The subject of Net Present Value, or NPV has been a hidden aspect of mortgage modifications for a few years now. The Net Present Value is a required calculation in the Home Affordable Mortgage Plan, or HAMP. It is a proprietary calculation to the banks, however. A lender will not reveal that calculation.
Net Present Value. or NPV, is the tipping point calculation that a lender uses in calculating what is the most beneficial strategy in resolving a troubled asset. (read: distressed mortgage.) Should they modify the mortgage? or short sell? Revealing that calculation is crucial to a distressed mortgage owner in helping them decide what strategy is best to pursue for them.
What is unsaid everywhere is that it most assuredly is the bottom line number that expalins why one distressed mortgage gets modified or short sold. Never mind all the ca-ca around banks losing supporting documents submitted by distressed homeowners seeking a mortgage modification or short sale. Simply, mortgage investors benefit from either mortgage modification or short sale. Mortgage servicers do not. Mortgage servicers benefit from foreclosure, period.
After nine months of perfecting the REST Report software for evaluating that same Net Present Value, Mandelman finally feels comfortable writing about that calculation.
Before quoting Mandelman I need to restate that he has been writing about the mortgage modification mess for two years. He advised the US Senate and the US Gouse of Representatives, as well as the Federal Trade Commission on the recently passed Financial Reform Bill. He know whereof he speaks.
Quoting Mandelman:
“About 600 homeowners ran reports and used them with their applications for loan modification, but that’s nowhere near enough… everyone in the country that needs to get their loan modified should be using the REST Report… and I think it’s now safe to tell everyone why, because it works and homeowners need to know, so they can have a real shot at saving their home through a loan modification.
All the other “analysis reports” out there are nothing more than pretty software… they do nothing but format your information. (That must include the software provided by the one main mortgage modification and forensic mortgage loan analysis company I submitted files to, who just shut their doors two weeks ago, leaving my customers high and dry.)
When the President signed the financial reform bill a couple of days ago, he signed into law two provisions that were likely overlooked by most… provisions that require Treasury to significantly increase the transparency of its loan modification program.
One provision requires Treasury to disclose the “secret” NPV formula that’s been causing all sorts of problems for the last year.
In some instances, servicers are permitted to use their own version of the NPV formula in conjunction with a HAMP loan modification. This means the bank is free to take the distressed homeowner to any mortgage modification plan that suits them, not the distressed homeowner.
It also says that Treasury must make available a Website on which homeowners can apply for a loan modification online, but I have to tell you I DO NOT RECOMMEND HOMEOWNERS DO THIS and I will tell you why below.
First of all, do you see the catch-word in that last sentence? All “NON-PROPRIETARY VARIABLES USED?” That’s a lot different than “ALL VARIABLES.” I know the difference between the two… the proprietary and the non-proprietary, so before you listen to someone who says they know what they’re doing, ask them to tell you what the difference is.”
(Mandelman suggests in as strong a terms as he can that that is a bad idea. I believe him. For the $795 fee, you just can’t go wrong. Again, he knows. And he doesn’t make any real profit from the report. Trust me, I know)
“Let’s stop fooling around here… Treasury is going to be making something available at some point, and that’s great. But, it’s still a very complex set of algorithms and decision analytics that are involved, and it’s not something homeowners are going to be able to pick up and run with effectively, I promise you.
Since this statement, HAMP has released a rough calculator on it’s web site. The disclaimer at the bottom essentially makes the calculator a parlor game. It will not hold up in court.
Plus, that’s just HAMP. And HAMP is not the only way to modify a loan, in fact it’s the least popular way with lenders and servicers… there are millions of loans modified outside of HAMP’s ridiculously complex rules and guidelines. And ever since Fannie Mae notified servicers that in order to be reimbursed under HAMP, they had to produce the paper trail showing that the mortgage was assigned to the trust, well… none have been submitted for reimbursement ever since.
The 12-page REST Report is the only thing available to homeowners that will accurately present to a servicer, whether it’s in the best financial interests of the investor to modify the loan.
In fact the REST Report is so accurate, you can take it into court. It will withstand any level of scrutiny. It has been supported by every judge who has seen it. Why not? It’s the bank’s own software and calculations.
“Accept no substitutes, because there aren’t any.”
What Mandelman also doesn’t state, but he knows it, is that for the forseeable future, the only way a distressed mortgage owner is going to get a beneficial mortgage modification is to do it themselves. The banks will string along just about every mortgage modification application for months and years. Why? Because they want you to go away. Get tired. Give up. There is no government accountability – and won’t be. Except for the RET Report, you’re on your own.
REST Report stands for “Real Estate Services Technology.”
How may I help?
Powered by Fast Secure Contact Form
I read every comment. Please use the Comment box below and tell me what you think.
The internet being what it is, certain search terms need to be empahasized so that you can find the best information. The REST Report is best classified as loan modification software, or mortgage modification software. It’s claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using the same software. It is best used as a do it yourself loan modification or do it yourself mortgage modification. For some reason, loan modification 2010 and mortgage relief 2010 are popular search terms.
This YouTube video says it all. Go here: How to Get A Beneficial Loan Modification Now Please ‘Like’ the video, will you? That makes it easier for others to find.
Read Mandelman, aka Martin Andelman here
tags:
do it yourself mortgage modification,do it yourself loan modification,loan modification software,mortgage modification software,foreclosure alternatives,loan modification hardship letter,calculate net present value, mortgage relief act, rest report,mortgage loss mitigation, loan modification 2010, mortgage relief 2010, foreclosure alternatives, loan modification process,loan modification services,
Originally posted 2010-07-25 12:25:33. Republished by Blog Post Promoter
{ 2 comments… read them below or add one }
Vetting the REST Report – http://www.mortgage-mod-monster.com/?p=594
The best option that borrowers currently have to help them avoid foreclosure is Mortgage Loan Modification.. This mortgage loan modification procedure is part of the loss mitigation process that was introduced jointly by the federal government and the mortgage industry with one goal in mind if the property owner can avoid foreclosure they can keep their property.