Ratio 36.8% and got denied because of income exceeds guideline

[pingtsaii]

My payment to income ratio is 36.8%. Days ago got a letter from Chase says my income exceeds their max number for qualification.


My gross income: 9666.67
Mort payment (interest only, will reset next year): 3560

Called Chase, one rep said they use 31% guideline, don't know why underwriter denied. Called a few days later, another rep said they use guideline (from govt) of 37%, that's why I got denied even after 2nd review.

I don't know who to trust. What should I do? Any suggestions? Thanks first

[ugh_2009]

Originally Posted by pingtsaii

My payment to income ratio is 36.8%. Days ago got a letter from Chase says my income exceeds their max number for qualification.


My gross income: 9666.67
Mort payment (interest only, will reset next year): 3560

Called Chase, one rep said they use 31% guideline, don't know why underwriter denied. Called a few days later, another rep said they use guideline (from govt) of 37%, that's why I got denied even after 2nd review.

I don't know who to trust. What should I do? Any suggestions? Thanks first

You need to keep calling until you get someone who knows what they are talking about. The front line reps are there just to get rid of you, most of the time they have no idea what they are saying. 37%?? lol, where did he pull that number from...

Try getting pass the initial rep, tell them that you want to talk to someone that can explain why you were denied and that you would like to go over the numbers to make sure no mistake was made. Don't give up..

[pingtsaii]

Called again yesterday, this time the agent said the ratio they use is 31%, but I'm not qualified because my income exceeds the maximum income listed in the guideline. (?? what, that's the first time I heard there is a income cap in guideline) I asked what is the number in the guideline, then the rep started saying he doesn't know the number, as he cannot see it but underwriter, and there is a max number, bla bla....

To me, I don't think Chase are really helping. Really, they just fool people around.

Do you think there is a max income limitation? Or who should I contact to to verify that?

[MAXIE19]

Ping:

There is no maximum income limitation, per se. Everything is based on your individual situation. Thus, one person may make $5000 and qualify and another person may make less at $2000 and not qualify. The calculations are mostly dependent on the 31% ratio, your income, and your mortgage payment amount. If they run the NPV test on you and it shows that you are not paying over 31% of your income on your mortgage, you can be denied based on the maximum income limitation.

Try running your numbers on the NPV test yourself and see whether you pass. I tried doing that for a friend of mine this weekend and the results came back not eligible for a modification because her payment is about 30% of her income but she had significant other hardship and expenses.

[pingtsaii]

As I know, NPV test is used for investors. Is there any websites allow us to run by ourself?

[OH-WAMU]

Originally Posted by MAXIE19

Try running your numbers on the NPV test yourself and see whether you pass. I tried doing that for a friend of mine this weekend and the results came back not eligible for a modification because her payment is about 30% of her income but she had significant other hardship and expenses.

I am very happy to hear this! Because mine is about the same and I was afraid I would be disqualified, too!

[MAXIE19]

Try plugging your numbers here. Click the link below and select the net present value worksheet.

To get started, you will need the following information:

Original loan balance.
Original amortization term.
Original interest rate.
Current unpaid principal balance.
Current interest rate.
Remaining term.
Whether your loan term is interest only or principal and interest.
State where property is located.
Current home value.
Monthly gross income.
Monthly Escrow amount (taxes and insurance)

You will need these numbers to check to see whether you pass the NPV test and whether the bank considers a modification beneficial. Of course, we do not know the variables that the bank uses, however, it is a starting point.

If you have any difficulties, post your numbers and others on the forum will be glad to help.

FDIC: FDIC Loan Modification Program Guide – "Mod in a Box"

[a2kman]

Originally Posted by MAXIE19

Try plugging your numbers here. Click the link below and select the net present value worksheet.

To get started, you will need the following information:

Original loan balance.
Original amortization term.
Original interest rate.
Current unpaid principal balance.
Current interest rate.
Remaining term.
Whether your loan term is interest only or principal and interest.
State where property is located.
Current home value.
Monthly gross income.
Monthly Escrow amount (taxes and insurance)

You will need these numbers to check to see whether you pass the NPV test and whether the bank considers a modification beneficial. Of course, we do not know the variables that the bank uses, however, it is a starting point.

If you have any difficulties, post your numbers and others on the forum will be glad to help.

FDIC: FDIC Loan Modification Program Guide – "Mod in a Box"

This information was GREAT thank you ... puts it into a true light.

[c150000]

sorry must be me ....but where on the link provided above
can i find the npv test?

cheryl

[MAXIE19]

Click on the link, under workout program guidelines, select net present value worksheet and the spreadsheet will come up. Then modify the numbers to fit your situation.

[c150000]

thanks
i found it but my god!! whats it all mean?
i must be an idiot!!

current prin payment thats without tax and ins right?

how do i know what my past due intrest is? what iam behind?

and upb? accurrued int and escrow?

i have not idea what all this is

i will try

[c150000]

i cant do this, is there someone one here that can to it for me my head going to explode!!!

cheryl

[MAXIE19]

Post your numbers to the questions below and I will do my best to assist you.

Original loan balance.
Original amortization term.
Original interest rate.
Current unpaid principal balance.
Current interest rate.
Remaining term.
Whether your loan term is interest only or principal and interest.
State where property is located.
Current home value.
Monthly gross income.
Monthly Escrow amount (taxes and insurance)

[Marie T]

Hi Maxie as far as the NPV program - does this mean that they are not using the 2% floor any more? Just curious as it seemed last time I ran the NPV that they were uisng 2% as the floor but can't find my copies I printed off. It still says I "pass" so hope that is good. On mine, says PV Estimated loss is $284,881 and Modification Value is $151,074 and Benefit from Modification is $93,923.

I have been on the phone with so many different people today about this mod my head is swimming. We really can't put anything in for Foreclosure Scenario right other than my rough guess at current value? I can guess based on other houses in my neighborhood that it will take more than 10 months to sell mine but that depends if they market mine for way less.

Maxie have you talked about the NPV when you talked to WAMU/Chase? Not sure I can talk intelligently about it but I am (supposedly) getting a call tomorrow from my negotiator. I still do not have the "package" they said was sent on August 7th and I can't afford that increased payment anyway - they have told me they used 37% of my "gross income" and they have my gross income over by almost a thousand so makes a pretty big difference. If they use 31% and my real gross, I think I could squeak the payment out.

pingtsaii - your gross pay of 9666.67 and what your payment is going to adjust to, 3560 is really close to what mine is right now before modification and we cannot afford it...we used to make more money like everyone else! I also have insurance, HOA and taxes of about $626 month on my own, not escrowed. First they denied me for insufficient income and now that I raised my income, they are trying to put me on a plan of $4,200 a month. I guess it could work if we did not have to buy food and pay for utilities!

cheryl150000 - I could not figure it out at first either - just read every line and you can probably get most of it. First box is Loan Origination info and Status - you should know that - current UPB is unpaid balance. Borrower Status -put in your monthly gross income and what your monthly property taxes and property insurance is. I do not think we can figure out what goes in Foreclosure Scenario except you should be able to guess what the current value of your home is and put that in.

[c150000]

290.000.00 15 year balloon (01-2007) balloon payment 215.000.00
6.99
principal and interest statement says 274.96 prin 1.654.22 interest

coventry rhode island

308.000.00 home value
gross income rental is 3950.00 but i think they only use 75% of this?
wage income gross 1504.00
monthly escrow is 684.00,, but iam paying off a shortage of 500.00 month next month was to be my last payment on that

thanks cheryl

[MAXIE19]

Marie:

Everytime I pulled the FDIC website spreadsheet up, it has always had a program interest rate floor of 3% for me. Of course, you can change that number to 2% if you like, however, I do not know exactly what variables Chase is using. I was denied twice for insufficient income, however, when I plugged in my numbers using a rate of 2% as required by the HAMP guidelines or even up to 2.7% for 40 years, I passed and needed no principal forebearance. The supervisor rep who is helping me emphatically stated that they are not offering anyone 2.5%. This however, flies in the face of the success stories on this forum from Chase and the HAMP guidelines. Not sure if it had anytime to do with the fact that I have a super jumbo loan. However, I took that as a cue that I have to present numbers that would pass muster using interest rates of at least 3%.

And so, when I resubmitted this third time, I included two proposals using my NPV results at 3% and 3.25% with no principal forebearance to argue that a modification would be more beneficial than a foreclosure in my case. I also researched what comparable homes in my neigborhood were selling for and provided at least five comps to show that comparable homes purchased a few years ago for 1.8 mil and 1.7 mil are now selling or have sold for only 1.1 mil. One of my comps indicates that the home (a new construction just like mine) was purchased in March 2007 for 1.8 mil and sold in April 2009 for 1.06 mil after having been on the market for over a year.

Following my third resubmission, I was not summarily denied this time and I am still waiting to hear the final word from Chase.

[MAXIE19]

Cheryl:

What is the unpaid principal balance on your last statement. Your situation is a little different from that of most due to the balloon payment that is due at the end of your loan term of 15 years. Just using a slightly reduced number from 290K produces results that are off the charts. It is also saying that you require an excessive principal forebearance to qualify.

[c150000]

hi
283.452.00 balance
there is no where to put in its a 15 year balloon right?
i noticed its for regular loans

of course it wont be easy its mine!!
do you know anything about what happens after your put on a 3 month trial (hamp)
and if you get denied?
if i pay what they asked 1600.00 (ive been paying reg payment, but cant get current)
and put away the diffrence (is what they said)
i will owe them 4500.00 if denied, would they work with me on that
or just demand it? if the mod is denied
i dont have a warm fuzzy feeling about this

cheryl




cheryl

[c150000]

i wonder where i can find out where and how they figure the 15
balloons notes........?

i CANT be the only one CAN i

cheryl

[MAXIE19]

Why don't we maintain a positive attitude. If they placed you on the 3 month trial plan, then maybe, someone has screened and pre-qualified and determined that you meet the eligibility guideliness. This should then be a good thing and a precursor to getting that permanent modification.

Remain Blessed.

[c150000]

thanks
i know iam very negitive, i shouldnt be but i cant help it

ok positive, positive positive
wait if what you said above was true that would mean SOMEONE
at chase did the right thing!!!
no that cant be true..............................see what i mean

goodnight and thank you again cheryl