The Net Present Value Test (NPV) is a calculation which indicates how much a loan as an investment is worth today. Mortgage investors will compare what a mortgage is worth today with what a mortgage is worth after a modification. If the modified mortgage has a greater investment value than the unmodified mortgage at its present state, it is likely that the NPV will be positive and the investor may have to modify the mortgage. If the NPV is negative, the investor does not have to modify the mortgage. Borrowers applying for non-FHA loan modifications may need to pass the NPV test, which means that the NPV needs to be positive in order to be modified.

If a servicer runs an NPV test and declines a borrower for a loss mitigation option, then the servicer must provide all of the inputs used in the NPV test. The website CheckMyNPV.com can be used by homeowners who have been denied a modification because of their NPV result. CheckMyNPV.com provides only an estimate of a mortgage servicer’s NPV evaluation, but it can be useful to ensure that a denial based on NPV negativity is authentic. Additionally, if one of the NPV inputs is disputed (for example, a property valuation), then CheckMyNPV.com can be used to see whether changing that input would produce a different result.

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