My Net Present Value

I am doing a loan modification. Customer lives in Seattle and has 2nd property , single famioly house in Delray beach fl.  Lender is Suntrust. Has not made a payment since Dec 2008.  Her finacials appear to qualify for a modification.

She just got the property leased for a year with a 2nd year optiop. She can prove the lease and the fact that she has recieved 1st last and security.

Can I expect the mod to go through if everything is up to par or will the fact that it is a 2nd home make it impossible even if she has it rented?

Thank You,

Roben

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Hello Roben,

The fact that it is a second home means that she will not qualify for the Home Affordable Modification Program (HAMP), but she may qualify for a house modification if it passes a net-present-value test subject to investor approval. 

Recent Testimony by Alan M. White of Valparaiso School of Law before the House Subcommittee revealed that lenders recover only 35% of the loan balance on average in foreclosure – they lose 65%.  Based on this, it would seem to be obvious that a successful modification would have a higher net-present-value than foreclosure. 

Thanks for the questions and hope this helps.

Paul