12. On April 13, 2009, ASC entered into a Servicer Participation Agreement for the Home Affordable Modification Program (the “Contract”) with Fannie Mae; the latter acted as Financial Agent of the United States. The Contract is attached as Exhibit 1.
13. If a borrower under a loan serviced or owned by ASC seeks modification, the Contract requires ASC to first determine eligibility requirements of the borrower and the loan in question.
14. If the borrower and the loan are eligible, ASC must then perform a Net Present Value (NPV) Test to compare the value of the money that it would receive if the loan were modified with what the value it could expect from foreclosure.
15. If ASC, as servicer and owner the Loan, can expect a greater return from modifying the loan, the loan is considered NPV positive; ASC then must modify the loan absent fraud.
16. As a servicer of the loan, as opposed to being the owner of the loan, ASC must modify the loan unless the contractual agreement it has with the actual Holder of the loan prohibits modification. In that case, ASC is required to use reasonable efforts to obtain waivers or approval of a modification from the Holder.
17. Plaintiff is informed and believes the current investor allows modifications of its loans, including the Loan.
18. To date, ASC has not indicated that the Loan cannot be modified pursuant to HAMP’s terms.
19. The modification must result in a monthly payment that includes principal, interest, property taxes and insurance, and any other pertinent fees such as Homeowner Association Dues. The resultant payment cannot exceed 38% of the borrower’s gross income. See Exhibit 2, Home Affordable Modification Program Guidelines, March 4, 2009
and Exhibit 3, U.S. Department of the Treasury Making Home Affordable Summary of Guidelines.
20. Plaintiff, at all times relevant, was the current owner and occupied Plaintiff’s Home; the Home was not investor owned, vacant, or condemned.
21. Plaintiff’s Home is a single-family property and is Plaintiff’s primary
22. The total amount of the unpaid balance of the Loan does not exceed the
Contract’s maximum amount of $729,750 for qualification. (Exhibit 5.)
23. Under the Contract’s Guidelines, Plaintiff, his loan, and his home qualify for a modification under the Contract’s Qualification Terms. (Exhibit 2 at p. 2.)
24. Plaintiff’s gross monthly income is approximately $2,850; a 38% monthly payment would be $1,083.
25. After deducting tax and insurance payments, $783 will apply to the loan each month.
26. Amortized over 40 years, a stream of payments under the Contract results in a Net Present Value of approximately $390,000.
27. ASC refused to offer such a modification under the Contract.
28. ASC agreed to temporarily suspend foreclosure action while qualified
borrowers, such as Plaintiff, are being considered for “alternative foreclosure prevention options.” (Exhibit 2 at p. 3.)
29. However, ASC instructed its sale trustee, NDEx West to sell Plaintiff’s Home at auction.
30. ASC failed to comply with the conditions of the Contract.