Article submitted by: 911 Foreclosure - Loan Modification Advice
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While millions of homeowners struggle with being in, or frightfully close to foreclosure, it would seem well advised for more banks to approve the modification of loans on their books; before of course they got into foreclosure.

You would think.

One would hope for results since the U.S Treasury Department planned to meet with the top mortgage servicing companies on July 28th. The members of this meeting also included ACORN (Association of Community Organizations for Reform Now), Neighborworks (the Neighborhood Assistance Corporation of America) and the National Fair Housing Alliance to try and reevaluate the endless list of homes being foreclosed upon.

During the push to resolve the foreclosure epidemic, the Obama administration released in February their foreclosure prevention plan for distressed homeowners.

With only 200,000 home being modified since February, and millions currently in foreclosure; one can barely call this progress ratio a success.

What they are not explaining in the press is the reason WHY these modifications aren’t going through. Since there isn’t very much information about mortgage modifications details, no one is officially saying a reason. But anyone can plainly see from the thousands of complaints on forums on the web that more modifications are being denied than approved. This is not a hard fact, rather an educated guess based upon observation.

What is the hard part about getting a modification?

The answer is a little factor called Net Present Value.

On September 15, 2008, the Mortgage Bankers Association held a regulatory compliance conference. At the conference, a presentation was made to the members of the MBA discussing

Net Present Value analysis and Loan Modifications. The main focus of the conference was to outline out mortgage banks and servicers should employ the Net Present Value results to weigh what is in the best interest of the investor.

Did you catch that? What is in the best interest of the investors. They did not say Whats in the best interest of the borrowers..

Without getting too technical, Net Present Value or NPV compares the value of a dollar today, to the value of that same dollar in the future. NPV is used to determine whether investors in U.S. mortgages would be better off modifying your existing mortgage or foreclosing on your mortgage at some time in the future.

Plainly speaking, even though your paperwork may be perfectly filled out and your application looks perfect on paper; you mortgage can still be denied a modification. Always keep in mind that the NPV is the underlying concern to the lender.Fair? Probably not. But it is the reality of the game. And unfortunately, there is not all that much you can do about it except for this?

If you are speaking to an attorney or other loan modification expert and they say something like We have handled thousands of loan modifications and we’ll be able to get one for you, run like hell.

The fact is, no company or attorney has gotten thousands of loan modifications for anyone! If you are seeking expert advise or assistance with your modification, simply ask them if Net Present Value calculations will come into play with your modification request. 9 out of 10 experts won’t be able to answer you. And you will immediately know that you are not dealing with an expert.