I think I understand mark-to-market loan-to value ratio...
mark-to-market I believe means fair market value (what is your home worth today?)
loan-to-value is a ratio of the unpaid principal balance (UPB) of your loan divided by your home's current value times 100.
Let's use an example.
You owe 225K on your mortgage loan.
Your home's mark-to-market value (fair market value/what your home is worth today) is only 200K.
Your current (unmodified loan) LTV is 225K/200K*100 = 112.5% (loan amount/home value * 100)
If your NPV test is negative AND you require principal forbearance to achieve the 31% target, the unpaid principal balance (excluding the deferred principal balloon amount) must create a current mark-to-market LTV (current LTV based upon the new valuation) greater than or equal to 100 percent.
In my fictitious example, let's assume they have to forbear 50K, which now brings your UPB down to 175K. Your new mark-to-market LTV would be as follows: 175K/200K * 100 = 87.5%. Since this is lower than 100%, your loan would not be modified if your NPV was negative.
If they forbear 10K, your UPB is now 215K and the mark-to-market LTV would be 215K/200K * 100 = 107.5%. This is greater than 100% so if your NPV is negative then your loan would be modified.
If they forbear 25K, your UPB is 200K (exactly what your home is also worth now). Your mark-to-market LTV would equal exactly 100% and if your NPV is negative, your loan would be modified.
I think this is what that statement means. Anyone else have a take on this? Am I correct in understanding this?
ama125
Your Intelligent possibility is beyond my game... !
Let us know whether your real estate friend and HUD counselor concur with your very well put togther findings and example -
I wonder how many borrowers it may or may NOT help, for those who have a negative NPV and are with Fannie or Freddie...
So, let's say my total principal due is at 200,000, but my home is only worth a current market selling price of 140,000 -
Then, assuming for me to receive an affordable / VIABLE loan payment, the servicer would need to lower my interest to the 2 % floor and reduce my principal by 60,000, to equal a NEW MODIFIED principal balance of 140,000
Ok, now assuming they reduce 60,000 from my current principal due of 200,000... that would equal 140,000 due principal. With a non interest balloon payment due, of the 60,000, at end of loan or when I sell... ?
Since 140,000 is the current market value selling price I would take that 140,000 divide it by the NEW MODIFIED reduced principal balance of 140,000 and come up with the 140 / 140 = 100 %
So then I would qualify for the HAMP, since I am not over 100 %
Under any circumsatnces, I could be wrong, this seems at my first glance to be yet another LOUSY TRICK for the servicers to pull and is yet another way to SCAM and SWINDLE more borrowers
How you may ask ? Well, the current market value / the current market selling value etc or whatever they want to call the value of our homes, will be MANIPULATED TO SERVE THE SERVICER
For example : I phoned Bank of America about 2 weeks ago and they told that I immediately qualified for their HARP / The REFINANCING program
They told me my home was worth 210,000 which was a total Blatant LIE
Most of the homes around me are selling from 108,000 to 140,000 MAX and the 140,000 is only for homes that have many upgrades and are in pristine condition ..
Bank of America lied to me, just so they could try and manipulate me into a REFI, with bad terms and more fees for themselves.
So I can only assume they will try and mess with everyone who has a Negative NPV and manipulate the borrowers with their own Bank of America OPINION of what a home is currently worth, in order to favor themselves and not allow the HAMP to take place, if they do not want any borrowers to get the Modifications -
SO BORROWERS BEWARE, when applying for HAMP - Make sure you have plenty of TRUE market Value selling price evidence for your home, so the Servicers and Investors will not be able to deny / disallow a modification, based on their own swindling opinions of what your home may or may not be currently worth..
Yet another loophole for the banks and yet another part of the puzzle to fully understand and make sure our piece of the puzzle fits and completes the modification puzzle and NOT their own swindling piece, which will deny a modification in their favor
There is so much to figure out and SADLY, all of us borrowers need to be one BIG step ahead of these bank, servicer, investor swindlers, or else we are one BIG step behind and they win and we will lose !!!!
Never Give up !
Thanks again ama125
Respectfully,
Thanks2u
