Along with this, The National Association of Home Builders/Wells Fargo Building Confidence Index increased to 44 during the month of May for the first time in five months. The future outlook amongst builders for home sales during the next six months rose to the highest level in over six years. However, it was noted that builders face many challenges. "While builders today are considerably more optimistic than they have been at earlier stages of the housing recovery, numerous challenges are slowing their ability to get new projects underway," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "In particular, limited access to construction credit, tough qualification standards for mortgage borrowers and rising costs for building materials, developable lots and labor are impacting the pace of construction activity."

The National Association of Realtors reported that Existing Home Sales increased in April 0.6% to a seasonally adjusted rate of 4.97 million in April. Resale activity for the month is 9.7% higher than April 2012. According to the NAR report, sales remain below demand due to limited inventory and tight credit.

Lending restrictions continue to be an issue. According to The Federal Reserve Board April 2013 Senior Loan Officer Opinion Survey on Bank Lending Practices, "Modest to moderate net fractions of banks indicated that they were currently less likely to approve such loan applications with a FICO score of 620, depending on the down payment, though most of those were smaller banks. Willingness to approve applications for most of the other FICO score-down payment categories was reportedly about unchanged from a year ago. However, a modest net fraction of banks were more likely to approve an application with a FICO score of 720 and a 20 percent down payment. Banks were also asked to compare their bank's current likelihood of approving an application for an FHA-insured home-purchase loan with a given FICO score and the FHA minimum down payment of 3.5 percent with their likelihood a year ago. About one-third of respondents indicated that they were less likely to approve such home-purchase loan applications with FICO scores of 580 or 620."

With this in mind, it is no wonder that mortgage refinances continue to drive the market at this time even though mortgage rates are low and should be attracting home buyers. Special refinance programs have made it easier to refinance for those whose credit is not up to lender requirements. In particular, homeowners who are eligible (loans that were sold to Fannie Mae and Freddie Mac prior to June 1, 2009) for HARP loans have the added benefit of reduced documentation and no need for an appraisal. Now that the HARP refinance program has been extended to the end of 2015, many more homeowners have the chance to get their mortgage payments up to date to meet the guidelines.

Although housing may be doing well, there are many challenges that lay ahead. Employment remains rocky with many consumers still unable to obtain work. The latest weekly report from the Labor Department shows that unemployment claims rose by 32,000 for the week ending May 10th to a seasonally adjusted 360,000 which was the most since late March. While housing may be heading into a seller's market and mortgage rates remain low, rising home prices may become too high for consumers who are not seeing their incomes increase to meet stricter debt to income guidelines.

FreeRateUpdate.com researches and reports advertised rates of active lenders within the FreeRateUpdate.com network.

According to a wonderfully dizzying article on AL.com -- All Alabama, the southern state is facing some roadblocks to the recovery of its housing market. According to words used in the article's headline, "foreclosures are crippling the state's housing market, despite a national trend."

Ready to have some fun? Here goes...

''

According to the Center for Responsible Lending, "Predatory lending describes unfair, deceptive, or fraudulent practices of lenders during the loan origination process." So, when we talk about predatory loans, we're talking about loans originated with any or all of the following being involved...''

As last year ended, "about $1 billion" of that money had been spent, according to the Treasury Department, and after trying to understand Treasury-speak for the last five years now, the fact that they included the qualifier, "about" in their sentence makes me believe it's something less than that amount.

A spokesperson for Treasury, Andrea Risotto, commenting in an article about the lack of funds being used to help South Carolina homeowners that appeared on GreenvilleOnline.com this month, said...''

The bill, AB 284, required banks to sign affidavits stating that the person signing had personal knowledge of all documents related to a foreclosure, and it provided for a monetary fine for recording false documents in the county recorder's office... things like that... and immediately after the bill became law foreclosures across the state fell by something like 80 percent.

Nevada's Attorney General, Catherine Masto, was applauded by homeowner advocates all over the country for having the courage to stand up to the too-big-to-fail financial institutions and protect middle class homeowners.''

When the foreclosure crisis began, and for the first few years as foreclosures continued unabated, foreclosure mediation programs were unheard of... in fact, it wasn't until people realized that HAMP wasn't really working as advertised and banks weren't modifying loans in the numbers they should that states started considering making mediation part of the process.

I could be wrong about this, but if memory serves it was Nevada that was first to put in such a program for its residents... it didn't work very well at first, but other states reluctantly followed suit... and finally after several years, the effectiveness of the various state programs has improved.

Still, and even with the problems faced by homeowners attempting to get their loans modified so widely known, it's never easy to put a mediation program in place. St. Louis and St. Louis County reportedly finally passed a mediation ordinance, "amid tales of chaos in the mortgage servicing business as foreclosures mounted."''

Unemployment climbed from 3.2 to 8.7 percent... the year is 1930. In 1931, the unemployment rate rises to 15.9 percent. In 1932, unemployment continues upward to 23.6 percent, and in 1933 it goes to 24.9 percent.

In 1934, we are said to be starting on a road to recovery as unemployment falls to 21.7 percent. In 1935, it falls again to 20.1 percent, in 1936 it's down to 16.9 percent and in 1937 it falls to 14.3 percent.''

Although this is good news for potential home buyers, not all those looking for a home will be able to purchase one. According to the report, 73.7% of new and existing homes were sold to families who earned a median income of $64,400 during the first quarter of 2013. This has dropped from 74.9% during the last quarter of 2012. "Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies," noted National Association of Home Builders (NAHB) Chairman Rick Judson, a home builder from Charlotte, N.C. "This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor."

Even with home affordability still within a range that is considered high, rising real estate prices are having an affect on many home buyers. According to the recent Standard & Poors/Case-Shiller Home Price Indices, real estate prices in 20 major metropolitan markets rose 9.3% year over year and have had the highest annual gain since May 2006. However, this is a different market today where mortgage rates are considerably much less than in 2006.

Even though the affordability index is high, homeownership continues to decline. According to the Census Bureau, the share of Americans who own their homes during the first quarter of 2013 was at 65%, a decrease from 65.4% last year. The current level is the lowest since the third quarter of 1995. While low mortgage rates may be fueling affordability, credit is tight and many consumers cannot obtain mortgage approval for a home purchase or a traditional refinance. While reports show that home prices are rising, many homeowners remain underwater. There are still many consumers struggling through this housing recovery.

For every positive piece of data, there remains conflicting information when it comes to the housing market. Many homeowners who have already refinanced through the HARP loan program are beginning to gain back equity in their homes as home prices increase, although those who bought at the peak of the market may not be seeing a complete turnaround just yet. Affordability has no impact on these homeowners who most likely will remain in their current homes until they are no longer underwater. At a time when home affordability remains high, FHA loans, which are commonly used by first time homeowners, increased the annual mortgage insurance premium in April, making it more difficult for some home buyers to afford a purchase. Although FHA mortgages are for low to middle income households, rising premiums are pushing many of those within these groups away from homeownership and back into renting. According to Ellie Mae's Origination Insight Report, FHA loans made up 22% of loan originations for April.

Without a doubt, there are those who are reaping the benefits of affordability. Low mortgage rates, a major component of affordability, are available even for jumbo loans for high end property purchases. This segment of the housing industry, which is faced with less borrower unemployment issues and better income stability, has seen a major improvement that began in 2012.

Since last year, home affordability has been high, however, nationwide homeownership has not improved. Without everything in place, including the availability of credit, affordability will not make much of a difference for the masses. Further, without the increase in residential homeownership, there may not be a full, sustainable recovery taking place.

FreeRateUpdate.com researches and reports advertised rates of active lenders within the FreeRateUpdate.com network.

Homeowners trying to get a loan modification should be familiar with the 2013 Net Present Value (NPV) tools used when evaluating a residential loan modification. In fact, many homeowners seeking a loan modification are waiting for a decision from their mortgage servicer based on the NPV of their modification, among other factors.

In the simplest of terms, according to the Making Home Affordable presentation of NPV on May 2nd, 2013, the concept of NPV " compares the value of a dollar today to the value of the same dollar in the future, taking inflation and investment returns into account" originally credited to the definition found at www.investopedia.com.

This trusted advisor online presentation for the Making Home Affordable HAMP NPV (Net Present Value) tool online revealed the updated software release for the free website software.

The website, www.checkmynpv.com, uses the same underlying formula as that of HAMP servicers, to conduct an NPV evaluation with their own estimated inputs.

However, the site does not evaluate for any proprietary, or jumbo, or in-house modifications that are approved at the rate of 5 to every 1 HAMP modification.

The free tool is very helpful as an estimator and not "decision" software tool that the mortgage servicer has to accept from a homeowner.

Principal reduction is not evaluated on this free site but can be evaluated in the private, non-MHA affiliated, third party software based on HAMP formulas called "loan disposition analysis" www.RESTReportMatters.com and www.LoanModHelpCenter.com who this author is affiliated with and can help obtain a principal reduction or in-house non-HAMP qualfied proprietary loan modification evaluation or service for a no-upfront service fee.

Principal reduction is always at the servicer's and investor's discretion depending on home value and is based on the NPV of that mod scenario with principal reduction when compared to alternatives without principal reduction.

Fannie Mae and Freddie Mac do not offer principal reduction through forgiveness, only through forbearance which is just agreeing to take less than owed for the time being in the simplest terms.

In a modification evaluation the net present value loan disposition  analysis of different scenarios, such as loan modification, short sale or foreclosure are measured in under a minute.

When considering a homeowner's mortgage, mortgage servicers and investors will compare the mortgage with several types of modifications, and without a modification such as short sale or foreclosure to see which option produces a higher NPV in dollar terms.

If the proposed modified scenario of the loan has a higher net present value NPV compared to the other alternatives such as short sale or foreclosure, then the loan modification is deemed NPV positive for a loan modification.

If the proposed modified scenario of the loan has a lower net present value NPV compared to the other alternatives such as short sale or foreclosure, then the loan modification is deemed NPV negative for a loan modification.

The MHA tool is free for homeowners, trusted advisors and counselors to use and you don't need a login but probably about 15 minutes to a few hours to get prepared for complex income situations, to run the inputs that only take 15 minutes, to then get the near instant output results of the NPV analysis as a positive or negative for the MHA HAMP program.

The range of acceptable debt to income ratio for the MHA HAMP program has now mirrored that of Fannie Mae and Freddie Mac's Standard Modification at 10% to 55% of gross monthly income for their housing payments by using the weekly Freddie Mac Primary Mortgage Market Survey Rate and by adding a 0.500% addition to rate due to a "risk premium."

MHA set up www.checkmynpv.com and recently enhanced it with the latest guidance as of February 1st, 2013 to include the new debt to income parameters.

Despite the guideline change, servicers can still use the housing to income ratio of the 1st mortgage, taxes, insurance and HOA dues to equal a range of 25% to 42% that was effective before February 1st, 2013.

Under the MHA HAMP program, servicers are required to offer the HAMP modification for an eligible mortgage if the NPV of the mortgage with the HAMP modification is greater than the mortgage as is.

The NPV evaluation result is one of many eligibility factors that must be considered in determining whether a homeowner qualifies for HAMP.

The website checkmynpv.com will allow a homeowner to estimate their loan's NPV for free under only MHA HAMP formulas, and that is where third party homeowner advocate groups like www.RESTReportMatters.com and www.LoanModHelpCenter.com help fill the gap in NPV analysis for proprietary loan mods and jumbo loans and rental properties and to verify servicer's Non-Approval Notices as being accurate or disputable for HAMP mods.

Servicers are allowed errors in the processing of loan modifications and inputs for NPV such as home values and income are incorrect at least 2 to 5 times out of each one hundred evaluations based on published audits such as this one starting on page 13 from SIGTARP  audit from June 18, 2012, titled "The Net Present Value Test's Impact on the Home Affordable Modification Program" :

"Within SIGTARP's judgmental sample of 149 applications that were reviewed for HAMP modifications between 2009 and early 2011 by 3 of the largest servicers -- Ocwen, Wells Fargo, and GMAC Mortgage -- SIGTARP found that the servicers could provide both accurate inputs and documentation for only 2 of the HAMP applications. SIGTARP found instances in which servicers failed to comply with HAMP guidelines on maintaining records on NPV inputs. For 19 HAMP applications, the servicer was not able to provide all of the inputs used to evaluate the homeowner for the NPV test. For another 19 HAMP applications, the servicer provided all inputs used to perform the NPV test, and provided documentation for all these inputs, but in some cases that documentation did not support the input used. For 109 applications, the servicers either could not provide documentation to support various inputs, or provided inaccurate documentation for various inputs. For the 149 denied HAMP applications, SIGTARP found that approximately 19% of the inputs either were entered incorrectly or could not be supported by the servicers' records. Because of the servicers' failure to maintain documentation of the NPV inputs, SIGTARP was unable to determine how many homeowners from its sample may have been wrongly denied a HAMP modification. One of the key inputs in SIGTARP's sample where SIGTARP found errors or lack of documentation was the borrower's gross income. Despite GAO's June 2010 report about servicer errors in calculating gross income, SIGTARP found servicer errors. The extent to which servicers used incorrect data increased the risk of an improper decision to an unacceptable level. When servicers use erroneous information in the NPV test, homeowners may be denied a HAMP modification and may ultimately lose their homes."

According to program presenters from the online seminar on the new release, the purpose of the free CheckMyNPV.com website is to "promote and facilitate dialogue between homeowners and servicers" which is a bit odd when you think of it because its such an esoteric subject but a good thing considering the SIGTARP review findings above.

A homeowner can get their information from their own documents such as mortgage statements, tax returns, income statements and other publicly available resources such as annualcreditreport.com , or from their servicer or from both or they can hire a third party to do this work for them by contacting the author which takes 15 minutes if all facts are prepared to evaluate, to as long 45 minutes or more depending on how prepared the homeowner is.

Some homeowners may have received a "Non-Approval Notice" if an NPV evaluation was completed and they can use the inputs from that sheet to run their own free analysis.

How it works is as follows:

After agreeing to terms of the use agreement for the www.checkmynpv.com site, the homeowner enters information regarding the investor and servicer of the loan.

The most challenging items to gather for homeowners are "data collection date ", which should be within 90 days of the servicer's evaluation.

Credit scores are used but note that if there are issues then the score can be disputed and not counted in the evaluation through a Letter of Explanation (LOE).

The middle of three scores from Experian, Equifax or Transunion is used or the higher of two, if only two come up.

If no score is used due to errors on the credit report, then zero is entered which reverts to the sate average fico score for borrowers seeking a loan modification.

Monthly income should be normalized and calculated by standard servicer income calculation methods to get gross monthly income before taxes or other deductions.

Property home values are subjective and based on automated home value models such as those found at www.eppraisal.com and the Chase home value finder or one of the www.RESTReportMatters.com best-in-class automated value models for a fee.

Total first mortgage debt is the total of the unpaid principal balance along with any past due payments and escrow advances that are added to the loan amount in a modification.

Remaining term on the mortgage is the number of months remaining on the mortgage from the data collection date.

The mortgage insurance coverage percent  is the percent percentage coverage at loan origination.

Other fields needed are if the mortgage is fixed or adjustable, and if any rates or payments are changing in the next 120 days from the data collection date.

Real estate tax bill and hazard bill and homeowner association fees and escrow shortages are needed as well as the months past due.

Imminent Default is defined as being less than 30 days behind and is also a question asked.

Before finally hitting the "calculate " button, the information must be printed or saved or emailed because they cannot be saved on the site.

The results page will have all of the inputs and the outputs that show your estimated negative or positive NPV.

The free help at the site is all about self service and the documents that are available at no charge are the Quick Start Guide, Frequently Asked Questions, Input Worksheet, Glossary of Terms, Sample HAMP Non-Approval Notices, Income worksheet and Total First Mortgage Debt Worksheet.

Here are the more comprehensive 45 inputs for a full blown professional and independent NPV analysis of HAMP and non-HAMP in-house, jumbo and rental property mods at this loansafe.org link.

Servicers use these findings as correspondence from the homeowner and if the same inputs exist and no other restrictions are present, the results can lead a reversal of a denial or support of a re-application.

Of course, they say they don't read what third parties send in, but what else would you expect from debt collectors?

Please note that as of now, software doesn't modify loans, it merely assists humans in modifying loans by doing the calculations and organizing information for human judgment.

If there are any issues with NPV that are not being addressed by your servicer, your non-profit counselor or HAMP Escalations, or you feel that you are not being evaluated or treated for a loan modification fairly, please email me at the loan mod help center at loansafe@loanmodhelpcenter.com for professional assistance that is unbiased, but at a nominal no up-front cost to the homeowner, along with your NPV inputs used that show you are negative or positive.

If you would like to talk to an expert, please call 877-663-4392 and request an appointment to see if a modification would benefit you by being NPV positive or negative based on your unique inputs.