Answers (23)
- Rachel Cugini, "agentcugini"
- Contributions:5
SHe is not a realtor ( funny thing is I am one ! ) She was recommended by an attorney that we refer to and she used to work in the banking industry and so far got it escalated to a presidents office and hopefully can get it done. Thanks again for your advisement.
"Realtors are not allowed to practice law and most likely are not up to date with all of the consumer protection laws available to you."
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But apparently executive assistants to attorneys are. The "advice" you posted below, as well as most of the advice you post on Zillow regarding loan mods, wreaks of legal advice to me.
"To get a correct npv calculation we need to know your income. However I ran your npv with estimates and at no point do you pass the npv test at all incomes I included.
I would either sell and take your equity before you use it on rent or reinstate your loan."
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Who is "WE"? This sounds a lot like "you" since "you" say that "you" ran the npv and it appears "you" are the one coming to these conclusions.
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But apparently executive assistants to attorneys are. The "advice" you posted below, as well as most of the advice you post on Zillow regarding loan mods, wreaks of legal advice to me.
"To get a correct npv calculation we need to know your income. However I ran your npv with estimates and at no point do you pass the npv test at all incomes I included.
I would either sell and take your equity before you use it on rent or reinstate your loan."
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Who is "WE"? This sounds a lot like "you" since "you" say that "you" ran the npv and it appears "you" are the one coming to these conclusions.
- JoAnna Jensen, "KeepyourhomeCA"
- Contributions:159
Hi Rachael,
I hope your working with an attorney.
It is illegal for any realtor to charge you money for a loan modification untill your 100% approved for the permanent loan mod.
Late 2010 the federal trade commission promulgated the mars rulling. you can find it at ftc.mars attorney exception.
I believe that a realtor has to have a $100,000 bond in order to do a loan modifiation.
Attorneys are allowed to charge your fee up front only if the following apply:
1) The attorney is practicing law
2) the attorney is in the same state as either your homr or you if your home is a rental
3) they put the money in a client trust fund and take it out as they use it.
Realtors are not allowed to practice law and most likely are not up to date with all of the consumer protection laws available to you.
Glad your still in your home.
JoAnna Jensen
I hope your working with an attorney.
It is illegal for any realtor to charge you money for a loan modification untill your 100% approved for the permanent loan mod.
Late 2010 the federal trade commission promulgated the mars rulling. you can find it at ftc.mars attorney exception.
I believe that a realtor has to have a $100,000 bond in order to do a loan modifiation.
Attorneys are allowed to charge your fee up front only if the following apply:
1) The attorney is practicing law
2) the attorney is in the same state as either your homr or you if your home is a rental
3) they put the money in a client trust fund and take it out as they use it.
Realtors are not allowed to practice law and most likely are not up to date with all of the consumer protection laws available to you.
Glad your still in your home.
JoAnna Jensen
- Rachel Cugini, "agentcugini"
- Contributions:5
thanks so much for all of your replies. well a year and a half later i am still trying to modify. I have been paying but I still want a fixed and my mortgage is too high. I am now trying with a 3rd party rep and she is only charging a very little. SHe got it into the right office and it looks good so far. Lets hope this works this time. Our credit is so bad from this all that I can't just refi. thanks again.
- workabee
- Contributions:1073
Woulda been timely advice in 2010 hun.
- JoAnna Jensen, "KeepyourhomeCA"
- Contributions:159
Hi,
Your Net Present Value is very important to know before you attempt a modification:
What your npv means to the owner of your loan is this:
Can I make more money today if I short sale or foreclose or will I make more money today If I modify the loan.
When you have equity it does present a problem, because if you sell the lender will get paid off at 100%.
The lender will not accept anything less than 100% of what you owe in back payments.
What you need to know is what exactly are your payments less any illegal fees they are trying to add on.
I realize this post is a little older but I wanted to make a comment about negative npv.
The servicer and owner of your loan is not required to do a modification if your npv is negative.
I hope every thing turned out well for you.
Sometimes the $4000 you pay to an attorney who knows what he is doing is better than loosing $200,000 in equity.
If you are looking for an attorney to work with you should ask the following questions so you can know what type of experience they have:
1) can you figure out my npv before submitting my application?
2) Do you dispute illegal charges?
3) What will you do for me if Im npv positive and I get denied?
You want to make sure the firm your working with will do more than just submit your rma and financials.
To get a correct npv calculation we need to know your income. However I ran your npv with estimates and at no point do you pass the npv test at all incomes I included.
I would either sell and take your equity before you use it on rent or reinstate your loan.
Best
JoAnna Jensen
Your Net Present Value is very important to know before you attempt a modification:
What your npv means to the owner of your loan is this:
Can I make more money today if I short sale or foreclose or will I make more money today If I modify the loan.
When you have equity it does present a problem, because if you sell the lender will get paid off at 100%.
The lender will not accept anything less than 100% of what you owe in back payments.
What you need to know is what exactly are your payments less any illegal fees they are trying to add on.
I realize this post is a little older but I wanted to make a comment about negative npv.
The servicer and owner of your loan is not required to do a modification if your npv is negative.
I hope every thing turned out well for you.
Sometimes the $4000 you pay to an attorney who knows what he is doing is better than loosing $200,000 in equity.
If you are looking for an attorney to work with you should ask the following questions so you can know what type of experience they have:
1) can you figure out my npv before submitting my application?
2) Do you dispute illegal charges?
3) What will you do for me if Im npv positive and I get denied?
You want to make sure the firm your working with will do more than just submit your rma and financials.
To get a correct npv calculation we need to know your income. However I ran your npv with estimates and at no point do you pass the npv test at all incomes I included.
I would either sell and take your equity before you use it on rent or reinstate your loan.
Best
JoAnna Jensen
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
You're welcome Rachel. Best wishes on you decision making process. ... Happy funding, Rudi
- Rachel Cugini, "agentcugini"
- Contributions:5
I appreciate everyone's responses so much. It is wachovia/wells fargo. Thanks again, I have a lot to think about.
- bradyfred
- Contributions:29
Hard money definitely has it's good days. Sounds like Ms. Dana Pointe had everything line up perfectly for her, including being eligible for a reverse mortgage.
Too often, people spend their entire savings trying to hang on to a home for purely sentimental reasons, and at the end of the day, still lose the home. Earlier, I mentioned 'ripping off the band-aid', so that even if you lose the home, you're not walking away with nothing but the lint in your pockets.
Having a couple hundred thousand in equity probably makes that less of an issue, but still, before you leverage an additional $70k or whatever (based on the 60%) against the home, you could just sell it and put most of that $70k in your pocket, to go along with the cash you already have. That might be more than worth another year in the house. Might not.
Too often, people spend their entire savings trying to hang on to a home for purely sentimental reasons, and at the end of the day, still lose the home. Earlier, I mentioned 'ripping off the band-aid', so that even if you lose the home, you're not walking away with nothing but the lint in your pockets.
Having a couple hundred thousand in equity probably makes that less of an issue, but still, before you leverage an additional $70k or whatever (based on the 60%) against the home, you could just sell it and put most of that $70k in your pocket, to go along with the cash you already have. That might be more than worth another year in the house. Might not.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
"may include the first years mortgage payments in the loan." I did that for a lady that was out of work for over two years. She basically spent her entire retirement savings trying to hang onto her $650,000 home that she had owned for over 20 years.
We needed to wait for the reverse mortgage limits to rise. In just over a year, we paid the private loan off with the new reverse mortgage.
This was a win-win for everyone. She kept her home and her equity without making any additional payments out-of-pocket. She has sent me business and is extremely thankful. "Hard Money" has it''s good days! .... Happy funding, Rudi
PS. F_G. She lives in Dana Point. Should you not believe me, I'll be happy to introducer her to you.
We needed to wait for the reverse mortgage limits to rise. In just over a year, we paid the private loan off with the new reverse mortgage.
This was a win-win for everyone. She kept her home and her equity without making any additional payments out-of-pocket. She has sent me business and is extremely thankful. "Hard Money" has it''s good days! .... Happy funding, Rudi
PS. F_G. She lives in Dana Point. Should you not believe me, I'll be happy to introducer her to you.
- bradyfred
- Contributions:29
By the way, just because you have significant equity doesn't mean you can't get a modification, but it does present an obstacle. The lender could foreclose and recoup their entire investment, along with covering all their legal fees, so it's not in their best interests to modify you. That's probably why you failed the NPV test.
If you are with BofA, you need to file a complaint with the Customer Relationship Advocacy Department.
As Rudi mentions, another option might be private money, but that might not be feasible if you can't afford to pay your mortgage *and* another loan on top of it. No one wants to pay 10% interest on $270k.
A better private money route would be to borrow the 20% of the arrears that you don't have, and bring the loan current, but ONLY if you can afford the payment you previously had. If not, you're throwing good money after bad.
If you are with BofA, you need to file a complaint with the Customer Relationship Advocacy Department.
As Rudi mentions, another option might be private money, but that might not be feasible if you can't afford to pay your mortgage *and* another loan on top of it. No one wants to pay 10% interest on $270k.
A better private money route would be to borrow the 20% of the arrears that you don't have, and bring the loan current, but ONLY if you can afford the payment you previously had. If not, you're throwing good money after bad.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Rachel, I do apologize. I read you question completely wrong.
You are not a candidate for a loan mod because of your equity position.
My only suggestion is to sell or seek a hard money loan. A trust deed investor may finance up to 60% of value. If your home comes in at the top end, that would be $270,000. They may even include your first years mortgage payments in the loan. Giving your husband and you less stress while seeking employment.
Private money is not cheap. Around 4 points and 10% to 11% in interest. If you sell you'll have about 7% in expenses and deposits for a rental and moving expenses. This may be your best choice. ... Good luck, Rudi
You are not a candidate for a loan mod because of your equity position.
My only suggestion is to sell or seek a hard money loan. A trust deed investor may finance up to 60% of value. If your home comes in at the top end, that would be $270,000. They may even include your first years mortgage payments in the loan. Giving your husband and you less stress while seeking employment.
Private money is not cheap. Around 4 points and 10% to 11% in interest. If you sell you'll have about 7% in expenses and deposits for a rental and moving expenses. This may be your best choice. ... Good luck, Rudi
- bradyfred
- Contributions:29
First, to answer the question about the arrears, the bank won't accept anything less than a full reinstatement without having an agreement in place to take care of the rest. They *will* cash it, but they won't apply it to the loan unless/until there's an agreement or the loan is paid off, or the house is foreclosed.
As for the modification, NPV isn't about the value of the property. Just to reiterate, your income has to be able to support a payment that's high enough to service the debt, and the maximum that payment can be is 31% of your gross monthly income.
Another consideration might be the property taxes. If you have really high property taxes, or if you have a significant shortage in your escrow account, the monthly tax payment might push your housing expenses above that 31% threshold.
I would never encourage anyone NOT to get help, but before you pay someone $4200, you should make sure that your income is sufficient to service the debt, because that's what the problem seems to be.
As for the modification, NPV isn't about the value of the property. Just to reiterate, your income has to be able to support a payment that's high enough to service the debt, and the maximum that payment can be is 31% of your gross monthly income.
Another consideration might be the property taxes. If you have really high property taxes, or if you have a significant shortage in your escrow account, the monthly tax payment might push your housing expenses above that 31% threshold.
I would never encourage anyone NOT to get help, but before you pay someone $4200, you should make sure that your income is sufficient to service the debt, because that's what the problem seems to be.
- Rachel Cugini, "agentcugini"
- Contributions:5
Ok so let me clarify, sorry for any confusion. I owe 191,000 on my loan and the compsfor the area ae between 380-450,000. So I could sell and get out a lot of money but I don't want to . I only fell behind because my husband lost his job and has been on unemployment and it pays so little in NY. So I didn't know why I would have a negative NPV when I could sell and see almost 200,000 out of my house.The denial paper from the bank said and the reps on the phone say I was denied for a negative NPV. They can't tell me why because they said that the gov't calcualted that and they could equest an explaination. Well I asked for it now 3 times in the last 30 days and I still have not received it.
I did see a lawye and he wanted to chage me 4200 dollars to modify and he was prretty sure he could but of course wouldn't promise and i thought that was a lot of money considering I am looking to pay some money back to the motgage.
Is this also nomal? I want to pay back 80% of what i owe in he arreas and they said they won't accept anything less then 100%. They will take the check and hold it but they will not cash it unless it is all of it. Is that right? Thanks again for all you responses.
I did see a lawye and he wanted to chage me 4200 dollars to modify and he was prretty sure he could but of course wouldn't promise and i thought that was a lot of money considering I am looking to pay some money back to the motgage.
Is this also nomal? I want to pay back 80% of what i owe in he arreas and they said they won't accept anything less then 100%. They will take the check and hold it but they will not cash it unless it is all of it. Is that right? Thanks again for all you responses.
- bradyfred
- Contributions:29
It is ambiguous.
- hpvanc
- Contributions:3080
It looks ambiguous to me, I hope they come back and clarify.
- bradyfred
- Contributions:29
"my mortgage is 200,000 less than what you can sell it for."
If it were upside down, wouldn't it be 200,000 more than what you could sell it for?
And by the way, what's wrong with taking cash out of your equity? Why is that something to be ashamed of? Why so narrow-minded and judgmental?
If it were upside down, wouldn't it be 200,000 more than what you could sell it for?
And by the way, what's wrong with taking cash out of your equity? Why is that something to be ashamed of? Why so narrow-minded and judgmental?
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
"200,000 less than what I can sell it for." Doesn't sound like equity to me.
"11 years in the home." It' very unlikely that an amount that negative, in that amount of time, occurring without the property being used as a piggy bank in the past, unless we're talking about something maybe valued at over $1,000,000. . ..... Happy funding, Rudi
"11 years in the home." It' very unlikely that an amount that negative, in that amount of time, occurring without the property being used as a piggy bank in the past, unless we're talking about something maybe valued at over $1,000,000. . ..... Happy funding, Rudi
- bradyfred
- Contributions:29
@hpvanc:
Apparently I misread that. If there's $200k in equity, then there's no reason to do a short sale.
@Rachel:
With your home being an asset, rather than a liability, it's understandable that you want to hang on to it.
And someone else owes you an apology.
As for the modification, it still comes down to your ability to pay the loan back. If your income can't support the debt, even at a modified payment amount, then you won't be qualified for a modification. Can't get a modification on a $300k debt if you only make $1500 a month. Sometimes the numbers just won't work.
And if you're in a situation where selling your home would put close to $200k in your pocket, that's not the worse spot to be in. You should definitely keep that option on the table.
Apparently I misread that. If there's $200k in equity, then there's no reason to do a short sale.
@Rachel:
With your home being an asset, rather than a liability, it's understandable that you want to hang on to it.
And someone else owes you an apology.
As for the modification, it still comes down to your ability to pay the loan back. If your income can't support the debt, even at a modified payment amount, then you won't be qualified for a modification. Can't get a modification on a $300k debt if you only make $1500 a month. Sometimes the numbers just won't work.
And if you're in a situation where selling your home would put close to $200k in your pocket, that's not the worse spot to be in. You should definitely keep that option on the table.
- hpvanc
- Contributions:3080
I read it as the house is worth $200K more than the current balance on the loan. Is that correct Rachel? If so this isn't a short sale if they do sell agents.
Could you also clarify on NPV Rachel. I suspect you have the wrong acronym. I'm not in the lending business, but from my financial background, only the wholesale buyer of the loan is concerned with NPV, it has nothing to do with you being able to get a loan. If you are eligible for a loan, someone will buy it.
Hopefully some lenders will help you out with some answers. I've never heard of creditors that would take money towards catching up.
Could you also clarify on NPV Rachel. I suspect you have the wrong acronym. I'm not in the lending business, but from my financial background, only the wholesale buyer of the loan is concerned with NPV, it has nothing to do with you being able to get a loan. If you are eligible for a loan, someone will buy it.
Hopefully some lenders will help you out with some answers. I've never heard of creditors that would take money towards catching up.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
What was your explanation for the cash-out refinances in the past 11 years? .... Happy funding, Rudi
- bradyfred
- Contributions:29
FYI, "NPV" stands for net present value.
I believe the reason for your denial is that, based on your income, they can't modify the payment to 31% of your gross income *and* service the debt at a minimum of 2%. In other words, 31% of your income isn't enough to pay the loan off with a really low interest rate over a period of 30 years.
Without knowing what the actual numbers are, it's hard to say what could be done to fix this. But some options are A) a principal forbearance/deferment, where you're paying interest on a portion of the loan balance, and the other portion is deferred to the maturity date as a balloon payment (for instance, you owe $400k, but you're only paying interest on $300k, and the other $100k is due in 30 years, with no interest accruing in the meantime); or B) increasing the term of the loan to a maximum of 40 years; or both. Like I said, I don't know how much help would be necessary in order to solve the negative NPV, but those are the basic guidelines.
It's important to understand that the lender isn't required to consider any of these programs. They can even opt out of HAMP altogether if they want, and tell you to either pay the full payment or kick rocks. How they handle your file is entirely up to their discretion. Of course, it's better for them to modify the loan and still make a bunch of money in interest, but they don't have to do that.
And as Georgia states, if you're $200k upside down, it might be wise -- from a business perspective -- to sell the house. It will likely be many years before you're even out of the red, not to mention actually in an equitable position. If it were a stock, you'd have dumped it already. It's not a stock; it's your home, so it's not purely a business decision. But it is likely still your most significant investment, so applying some common-sense business logic to the situation isn't a bad idea. You could sell the house, repair your credit and save money for the next couple of years, and buy a house in the same neighborhood later on the down the line, and owe significantly less than you owe now. Sometimes you just have to rip the band-aid off.
I only mention the short sale because you failed the NPV test and you're $200k upside down. Like I said, you might still have a chance for a modification, but make sure you keep all your options on the table, because if you have to choose between short sale and foreclosure, you'll be grateful for a long time if you take control of the situation and sell the house. Even if you never buy again, it's a much better position to be in.
I believe the reason for your denial is that, based on your income, they can't modify the payment to 31% of your gross income *and* service the debt at a minimum of 2%. In other words, 31% of your income isn't enough to pay the loan off with a really low interest rate over a period of 30 years.
Without knowing what the actual numbers are, it's hard to say what could be done to fix this. But some options are A) a principal forbearance/deferment, where you're paying interest on a portion of the loan balance, and the other portion is deferred to the maturity date as a balloon payment (for instance, you owe $400k, but you're only paying interest on $300k, and the other $100k is due in 30 years, with no interest accruing in the meantime); or B) increasing the term of the loan to a maximum of 40 years; or both. Like I said, I don't know how much help would be necessary in order to solve the negative NPV, but those are the basic guidelines.
It's important to understand that the lender isn't required to consider any of these programs. They can even opt out of HAMP altogether if they want, and tell you to either pay the full payment or kick rocks. How they handle your file is entirely up to their discretion. Of course, it's better for them to modify the loan and still make a bunch of money in interest, but they don't have to do that.
And as Georgia states, if you're $200k upside down, it might be wise -- from a business perspective -- to sell the house. It will likely be many years before you're even out of the red, not to mention actually in an equitable position. If it were a stock, you'd have dumped it already. It's not a stock; it's your home, so it's not purely a business decision. But it is likely still your most significant investment, so applying some common-sense business logic to the situation isn't a bad idea. You could sell the house, repair your credit and save money for the next couple of years, and buy a house in the same neighborhood later on the down the line, and owe significantly less than you owe now. Sometimes you just have to rip the band-aid off.
I only mention the short sale because you failed the NPV test and you're $200k upside down. Like I said, you might still have a chance for a modification, but make sure you keep all your options on the table, because if you have to choose between short sale and foreclosure, you'll be grateful for a long time if you take control of the situation and sell the house. Even if you never buy again, it's a much better position to be in.
- Georgia Kapsalis
- Contributions:487
Sounds like you should get some legal advise.
Or you may have to sell the house with a short sale. A local realtor can help you with this. Becareful to only work with licensed agents. No one should charge you anything in advance. Bank will pay for any selling costs. Good Luck
Georgia Kapsalis
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NEGATIVE NPV How do you dispute that?
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