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How is net present value (NPV) used in the Making Home Affordable plan?

April 26, 2017affordable Home NET npv Plan PRESENT Used value

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How is net present value (NPV) used in the Making Home Affordable plan?

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Your mortgage servicer will be required to use a NPV test to compare the present value of your mortgage’s cash flow with a loan modification and without a loan modification. If this test determines that the present value of the expected cash flow is greater with a loan modification, then the NPV test is said to be positive and your servicer must modify your loan providing there is no fraud or contract prohibition. Only your servicer can make this final NPV determination.