Find out here whether your loan meets the net present value test—
and if you may be eligible for a HAMP modification.

Empowering homeowners

Many homeowners who applied for HAMP loan modifications have been devastated to learn they were declined by their mortgage servicers. The reason given? Their loans did not meet the lender's "net present value" (NPV) test. Most homeowners had no idea what this meant, and worse, no way to challenge the decision.

The Treasury Department and HUD have rectified this unfair situation by giving you the same tool the mortgage servicers use, so you can calculate your own NPV.

What's NPV?

Net present value is a calculation that investors make to determine the best way to handle an asset. (In the case of a mortgage loan, the asset is the loan itself, not the property which serves as collateral.) Investors determine the present value of the loan as it is, based on a number of factors. Then they determine what the loan's present value would be if it were modified. The difference between these two figures is the net present value.

If the NPV is positive, meaning the loan's projected value would be greater if it were modified, then under HAMP rules the loan servicer must modify the loan. If NPV is negative, meaning the loan's value is estimated to be greater without modification, the servicer may still modify the loan—but is not required to under HAMP rules.

You can use the NPV tool to determine beforehand whether a HAMP modification is likely to work for you. Or, if you've already been declined for a modification based on the NPV test, you can run the numbers yourself and use the results to challenge the loan servicer's determination.

Options

Remember, being ineligible for a modification doesn't mean foreclosure is inevitable. You can pursue a short sale or other options with your servicer. To find out if a short sale is right for you, talk with a certified PartnerFirst short sale agent. You can access a list of those near you at our Find an Agent page.