
The Secret Test That Ensures Lenders Win on Loan Mods
• Pro PublicaIf the NPV test ultimately churns out a “negative” result, meaning the lender will make more money by denying the modification, the homeowner won’t get a Making Home Affordable modification unless the lender agrees to take a loss.
“Even though the administration is promoting loan modifications, they’re still operating from the premise that ‘we don’t want you to make loan modifications that aren’t going to make more money than a foreclosure “This is very different from what community groups see as the (program’s) purpose.”