wjctmortgagecrisis

Troubled homeowners who receive housing counseling are 60 percent more likely to avoid foreclosure and have their mortgage payments lowered significantly than borrowers who navigate the process themselves, according to a study to be released Wednesday.

For the rest of the article go to: http://www.washingtonpost.com/wp-dyn/content/article/2009/11/18/AR2009111800010.html

Many people who are behind in their mortgage payments try to contact the company collecting or “servicing” their loan to see if they qualify for a loan modification.   These consumers find themselves at the mercy of overworked employees and a computerized loan modification program which many claim is flawed.  A test that is often utilized by the servicers is often referred to as the NPV test.  This computer program software was designed to evaluate factors such as the value of your property, your ability to pay your  mortgage debt and the cost of foreclosure.  Anecdotal information provides that it is common for the servicer to continuously lose the paperwork submitted by consumers before applying the test, failing to apply the test at all before denying the modification or fail to accurately input the required information.

In an article appearing in Pro Publica at

the author points out this test may even provide a negative result for consumers most likely to succeed with a modified loan.  “A “huge driver” of the test, according to (Diane) Thompson, is the relationship between the current value of the home and the unpaid portion of the loan. If a house is worth more than the remaining mortgage balance, “there’s a benefit to the investor from foreclosing. It will recover the entire value of the loan if it forecloses, not if it modifies,” she said.”

In other words, if you have equity in your home, the owner of your loan may make more money by foreclosing on your home rather than allowing you to modify the loan.  This is not the purpose of the loan modification programs required by Congress and other governmental agencies.

Unfortunately, the test and the results are secret and the servicers are overworked and  vague about why your request for a modification is denied.  You may not get a fair chance when seeking modification.  If  you think you have been wrongfully denied a modification or you are only given the option to accept a modification you can not afford you should seek legal counsel to assist you in trying to navigate the process with an advocate on  your side.

You can read the transcript of a Morning Edition report on NPR describing the trials of  homeowners who were not given a fair opportunity for loan modification at

http://www.npr.org/templates/story/story.php?storyId=112660935&sc=emaf

WJCT’s Karen Feagins updated radio documentary examines the impact of foreclosures on the larger community. Jacksonville, FL.
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