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Is it hard to get approved for a loan modification with equity in the home?

We are applying for a loan mod to prevent foreclosure through B of A.  When I input our numbers into the Making Home Affordable NPV calculation, it shows a negative NPV. This is mainly due to the fact that we have equity in the home (so the investor would make more money by foreclosing vs offering a loan mod.) We are earning enough money now to make the monthly payment but we are behind by six months of payments so we are mainly doing the loan mod in order to get that amount put back into the total amount due (because we don't have the money to pay that off.) But it is disappointing to hear that possible because of our equity we could be denied....if we were underwater it seems we would have more of a chance of a positive NPV and thus eligible for a mod. 

Does this seem on track with what others have experienced? Even though the home owner makes enough income to make the monthly payment they are denied a mod because of too much equity?
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September 20 2013 - US
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Answers (3)

Have you tried Keep Your Home California? They can provide up to $25000 to cover past due payments. Look it up on internet. 

MHA has alternative HAMP 1 and HAMP 2 programs also available and lender can offer you proprietory loan mod which is bank's own loan modification offer, slightly higher rate then HAMP but could work for you and regardless of the NPV in that situation. 

One question is when was loan originated and with who, if it was with Countrywide turned BofA then the loan is most likely part of the National Mortgage Settlement and you can learn more about their modification guidelines under the settlement order in Exhibit A and Exhibit I on the website www.cwbsettlement.com?

Also, did they tell you reason for Negative NPV? Like Excessive Forebearance or Investor not participating? MHA is specifically intended to help with investor owned loans. Do not rely just on your inputs alone, ask bank to re-run them. 

Regardless, the bank can and should be willing to modify if you have one of the 3 D's for your hardship, Death, Disabiltiy or Divorce and there is a separate modification program available for unemployed homeowners too but I do not know details of that program. 
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September 22 2013
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Hi Brandon..thanks so much, this is very helpful. Per B of A, there are no other options for mods if this one is declined for NPV. Our loan is owned by B of A not Frannie or Freddi - I have been told that it is more difficult to get a loan mod if your loan is owned by a private investor (IE B of A) versus Freddie and Fannie. Not sure if that is correct. 
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September 20 2013
Bonny,

I can only assume that you fell behind on the mortgage payments because of some type of hardship.  Although you may not be eligible for HAMP, you may still be eligible for an in-house loan modification.  Having equity in your home doesn't mean you will never fall into a situation where you can't make your payments.  So, it's not a definite dis-qualifier.  They will most likely have you apply for HAMP first, and if you're denied, they can always review your file for an in-house modification.  It is important that you write a detailed hardship letter explaining what caused you to fall behind, and what has changed now that will allow you to make your payments on time going forward.  All the best!

BranTheMortgageMan 
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September 20 2013
 
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