Chase loan modification denial due to negative net present value

May 12, 2010: Even as I was taking Ms. De Laura’s (214) 626-2671 “courtesy” call from the Chase Home Lending Executive Office, an e-mail from the Wall Street Journal was waiting in my in-box, with a comment from Chase. Per the reporter:

“Here’s the response I got from Chase re your situation:

Chase communicated to the customer in the summer of 2009, in March of 2010, and in May of 2010 that the customer would not qualify for a loan modification because the analysis showed a negative net present value.   

 Is that correct?”

Was this another test? I composed my thoughts and replied:

“That is not correct. I have two written letters from Chase. The first denial, dated August 25, 2009, states in one sentence: “Your property equity exceeds our program guidelines.” 

The second written communication dated March 5, 2010 states “We are unable to offer you a Home Affordable Modification because we are unable to verify that you do live in the property as your primary residence”.

The case was reopened once I provided my voting records and residency was proven. 

There is nothing in May of 2010, indeed Shawnte Trowlsdell told me on 5/10/10 a letter was to have gone out on April 30th but it did not; she could not see the letter and did not know what it said or why it was not sent. My mailman has come and left today and there are no letters from Chase. The phrase “negative net present value” has never been used nor do I really know what it means…

Two minutes ago Chase called to tell me they were composing a written response to my letter to Mr. Lowman.” 

I was beside myself. I now had an answer, whatever “negative net present value” meant, because this was the first time I’d ever seen those four words in a sentence, and the sentence came from Chase via The Wall Street Journal. There was nothing in writing from Chase about this, nor had those four words ever been expressed in any of my hundreds of calls to Chase.

I didn’t know what it meant but I did know that the response from Chase was curiously worded in such a way as to imply I’d been told all this before, which was simply not true. There were really two sentences in the quote, strung together with the word “because”, only the “because” had never been shared with me. 

The Wall Street Journal needed to know this so I faxed the reporter copies of my two denial letters. I also sent a shout-out to my banker and broker friends to learn the meaning of “negative net present value” 

I spoke with my broker and another broker and a banker I knew – all were mystified by the term “negative net present value” and thought there must be some kind of mistake since I was not underwater in the loan, indeed; I had some equity, as evidenced by the August 2009 denial. The banker said she would dig deeper and get back to me. This was the same banker who had helped me prepare my monthly expenses spreadsheet; she was familiar with my situation and eager to offer assistance. 

Finally I sent an email to the Wall Street Journal reporter and expressed my frustration over not knowing what those four words meant and anger at having never seen them before. They seemed like more bank-talk designed to confuse and obscure, why couldn’t the guidelines and the formulas be transparent? 

His reply was chilling: 

What they mean, I believe, is this: It isn’t in the best financial interests of the owner of the loan to give you a modification. I believe they mean this: the net present value formula shows they would be better off either collecting payments from you under the current terms or foreclosing.”

 I hoped he was mistaken but I knew at that very moment that Chase had been playing games for with me for over fourteen months; they had only provided a clear answer when backed against the wall by the Wall Street Journal.

Was this the new American way, or just the Chase way? It seemed to me that Chase was continuing the predatory loan practices devised by Washington Mutual, and they were even better at playing the game.  

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7 Responses

  1. I got the same denial from BOA. I thought I was using the “Making Homes Affordable” program, not the make BOA richer program. I have never been late. I pay ALL my bills on time ALL the time. I have a good credit score. My mortgage, taxes and home owners insurance is 36% of my gross income. I requested my NPV inputs and we’ll see what they send. They obviously think they can get more out of my property by foreclosing than giving me an affordable mod…and it took them months to figure that out?? My 12 year old granddaughter can do that math. It’s just more bs to get more money out of the taxpayers who already bailed these greedy corporations out. I have never dealt with more incompetent people in all my life! Did they find these people in a head trauma ward?

  2. I’ve got one question – has ANYONE been helped by HAMP?

    After going through the process for 10 months – jumping through all the hoops Wells Fargo put in front of my progress, faxing thousands of papers, taking daily phone calls from the loss mitigation department, faithfully paying the reduced amount afforded by a temporary loan modification – I have been denied a permanent modification and am now in a worse position than when I started this whole process.

    My credit is ruined, since the bank shows all those temp mod payments as months that were not paid (120 days past due on my mortgage). I ended up owing way more than I could comfortably afford to pay. I had to sell my IRA to pay the total amount due on threat of foreclosure from the bank.

    HAMP and loan modification in general is a big FARCE!

  3. CHASE has been bs’ing me for over two years. They couldn’t provide me with detailed information. They simply refuse to take my calls seriously. In the meantime my rate is 7.35% interest only with a ,now, principal balance of $388K. Which started at $356K. Payments are almost $3K a month because they forced property taxes. My rate was due to adjust and said they could lower it and fix it, 4 years ago. They took their time. didn’t return calls for weeks at a time, next thing I know I’m getting foreclosure letters from CHASE, Intent letters, and all that jazz, yet nobody is returning my call. finally I said “hey, what’s going on because I can’t lose my home to you!” They stuck me with the same rate only fixed, piled on the difference that they refused to accept (my mortgage payments) and made me pay $9,000. FINE…. I will try again in a year. Since then, it has been DRAMA. Back to the same ignoring me routine. They don’t give me answers or how they calculated my debt ratio. According to my accountant, I’m at exactly 31% and had they started my modification two years ago my LTV would have been under 80%. Now, it’s a mess. Two years faxing paperwork and in return I still get a denial letter that makes no sense and that I do not qualify for MHA or any other program. They leave me with 3o days notice to decide what I’m going to do and they will start foreclosure after that. SOMEONE HELP ME PLEASE….. 😦

  4. We are going through the HAMP nightmare process now as well. My story is too long to explain here. However, we have hired an attorney and are fighting to stay in our home. In looking up a document at our town hall for her, we found out that the assignment of mortgage happened AFTER the foreclosure process was started. Apparently this happens all the time. So, this is an ILLEGAL foreclosure and we will be asking them to dismiss the case. Run to your town hall tomorrow. It may be worth it. Since we have a negative NPV, we are hoping that this will give us the leverage that we need to get the modification that we have wanted all along. If you have the money to pay your mortgage, but you are not, I would suggest hiring a good foreclosure/bankruptcy attorney and paying a forensic accountant to do a report for you as well. Think of it as rent. If you have an illegal foreclosure, you can ask that all of the legal fees be taken off your loan balance. Good luck to all of you!

    • The same thing just happened to me – since November of 2008, I’ve been working on a modification with Wells Fargo, (first World, then Wachovia) and after all this time I was finally to the “just waiting for the appraisal” point and I was told I have a negative NPV. Our family lawyer, realtors I’ve talked to, personnel within the bank itself, . . . nobody can tell me what a negative NPV means. When I searched online I found out that it is a “formula investors use to decide whether or not to invest in a business and is based on the value of the dollar in the future.” The formula itself is scary. I’m quite good at mathematics and formulas and I must say, I have no clue on how they came up with that one. Besides that, I was told by Wachovia Bank themselves, (by providing me with their long list of “input numbers and other info. used to calculate my NPV rating”), that there are several variables which can affect the results of an NPV rating, but when I
      called the number indicated to call if I wished to dispute their denial, the man who answered my call says, “well, I’m going to tell you now, and I’m probably going to be the first one to tell you, this, but your loan will never be modified because you have equity in your home.” When I said, “you mean to tell me that after almost 3 years of faxing you paperwork on almost a daily basis, that I’m not qualifying for a modification because I have equity in my home when Wachovia has been aware of this the entire time?” His answer was that they legally had to let people apply for it. I then asked if I had just $1. of equity, would my NPV rating still turn out negative?” His answer was, “Yes.”
      This is absurd, cruel, and unbelievable that the banks are doing this to people. The money from the government, (our tax dollars,) given the banks to “help the homeowner stay in their home” is, in reality, not helping out the homeowner at all, it is all going directly to the banks themselves. This display of greed by our banking system is unbelievable. I’ve owned my home since 1984, and it is my residence. We are talking residential; peoples’ homes here, not commercial business operations. If anyone has information which would help me at this point, I would love to hear about it.

  5. I have been told I have negative npv. I attempted to do modification april 2009 once my finances got bad. I was told by wells fargo they did not have a program for me. they said call back in may, then June then they said it would be ready in July. it was not available until November, I quickly submitted my docs. long story short, I got 2 renters, 3 jobs, cut back on finances. they still say they can not help me. they do not have a payment program for me because I am more than 90 days behind. I received the npv doc on thursday of last week. it took them over 30 days to send it. everytime I called they said we have 10 days to get it to you. I said it has been over 10 days. anyway the numbers on the doc are not roght. I will fight this point has anyone succeeded in fighting the negative npv issue?

  6. I really need some help. I have been denied by ASC, Wells Fargo for this stupid NPV and they can’t even explain what it means. I am now in a position to pay my monthly which was a different story almost two years ago when I started this whole thing. If it’s a government program shouldn’t you be approved so long as you can prove you can make the payment. I have no idea what to do. Does anyone know a good foreclosure attorney in the Los Angeles area that has helped you. Please, please. help.

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