Understanding NPV – LoanLove.com’s New Article Explains

San Diego, CA (PRWEB) July 25, 2013

LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. A recently posted article continues to offer information that can help underwater borrowers in understanding NPV.

Those who have gotten behind on their home payments may find that their only option to save their home and avoid foreclosure is to get a loan modification. In the past few years, hundreds of thousands of homeowners have turned to home mortgage modification to help them deal with the twin demons of soaring mortgage payments and spiraling property values. The process seems relatively straightforward: Fill out a few forms, provide a few financial documents and the bank does the rest. The problem arises when the borrower gets the lender’s decision, typically a letter with the terms of a modification or an outright denial. In either case, there is no real explanation of how the lender reached their decision and many homeowners are left wondering if they’ve been given the “whole story.” This is why it important to know what NPV means.

The Loan Love article explains: “When a lender considers mortgage modification, they begin by determining the net present value, or NPV, of the mortgage and property. So what’s NPV? In brief, NPV helps lenders determine whether it’s in their best interests to foreclose on a mortgage or to modify that mortgage to help the current homeowner remain in the home. NPV is determined by a ridiculously complex formula which relies in part on looking at what a dollar is worth today and then comparing that with what a dollar is projected to be worth in the future. Once a lender determines the NPV, it decides which option to offer the homeowner. It doesn’t take a mind reader to figure out that the option the lender offers is the one that’s going to be most profitable to them. So what does this mean to consumers? It means that to be sure you’re really being offered the best option, you need to have an independent analysis done that uses the same NPV formula. One analysis proving especially popular with consumers is the REST Report.”

So what is the REST Report? Loan Love explains “The REST Report was developed to help consumers, and it does a lot more than just calculate NPV. For the first time, the REST Report has enabled homeowners to fight back against incompetent lenders and expedite the loan modification process. For instance: Are you eligible for a lower interest rate and monthly payment? Are you eligible to have your principal decreased? Maybe a short sale really is your best option? The REST Report will tell you. What’s really important: The REST Report is not being produced by an individual lender – it’s an objective report produced by industry experts, which means you can rest easy knowing the information you’re getting is in your best interests and not sugar-coated to suit a bank’s needs. Homeowners who’ve used the report have literally saved from tens of thousands to hundreds of thousands of dollars, either through payment reductions or reductions of their principals.”

For more details on NPV and the REST Report, please visit LoanLove.com to read the full article.

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