What expenses should be reported on the financial statement?

[Sylvia]

I called my 2nd lender to negotiate a loan mod. I provided my financials and income over the phone. They told me that my debt to income ratio was too high and that they could not agree to a modification.

They asked very detailed questions like how much I spend on food, utitilities, etc. However, in doing research on the internet and talking with others who have modified their loans, I am told that the only expenses the lender is concerned with are the mortgages, taxes, insurance, minimum credit card payments, car payments and that they are not interested in expenses like food, cable TV, etc. But, what if the lender asks about these??

Before I start on my first mortgage, does anyone know for sure what I should include in the financials and how to get around not providing "everything" to the lender?

Thanks to all who contribute to this forum. It is such a help!

[Dan Bailey]

Sylvia,
The decision to modify is up to the investor, therefore there has been no set "formula" for financial statements. I believe the servisor is required to ask for financials according to which investor is on the loan. I too, was asked for food expenses, etc...while others were not.
You can try to start out the conversation by asking what they are looking for in terms of positive or negative funds at the end of the month...but giving more mis-information may end up in the same results we first encountered with the mortgage.

[LHarveyMadman]

When I started my modification process, my lender asked for expenses for everything - cell phone, cable, childcare/child support, alimony (doesn't apply, but they asked), food, gar***e collection, etc etc etc.

[linnzy]

When I called my 1st mortgage they asked for everything, but when I called my 2nd mortgage they only wanted the mortgage, taxes, insurance, credit cards and car payments. Go figure.

[Sylvia]

Hi Linnzy,
I have tried two times to get the collection dept. of GMAC to refer me to loss mitigation for a loan mod. Their procedure is that I must start with collections, they take my financials over the phone, and they tell me right then and there that I either qualify or not. The first time I tried it, I had too much of a surplus of income and they didn't refer me. I called back and explained that I didn't have the correct numbers and we did it again. So I increased my expenses by spending more for food, etc. This time they said that my expenses were too high!!! I can't keep calling them back and playing "let's guess what numbers work today", because they are eventually going to say that I am just making it all up. Can anyone please give us a formula that will work for most lenders? I am ready to throw in the towel....

[Moe Bedard]

Sylvia,


There isn't a formula for financials that works with each and every investor out there..............you would need to ask them what expenses they require.........some have criteria on how much credit card debt you can use for example, and if they require gross income or net income..............and then put exactly what you have.

You can also get directly to loss mit by calling
GMAC Loss Mitigation
1-800-850-4622 ext. 2362609 or ext. 2365442

[Tom H]

I'd start with this, sooner or later you'll get to it anyway:

https://www.gmacmortgage.com/pdfs/Fi...l_Analysis.pdf

You need to have enough to make a modified payment, but be strapped in the current one (or a future reset, etc.) I had a surplus on mine too; but after some explaining I finally got them to realize paying the neg-am payment on an option arm isn't really making the payment at all and doesn't equate to long term affordability. To actually pay-off the loan I would have had to double down the payments.

[Sylvia]

Hi Tom,
Thank you for that link. I can't even get to that process because I have to be "approved" by the default/collections department before they pass me on to loss mitigation and before I can fax anything in. My fear is that because I keep calling them and and going through a trial and error process and keep stopping the process and/or keep getting turned down that they will eventually tell me that I cannot even consider talking to them about a loan mod.

I have found that everyone I talk to is extremely rude, cold, and totally unwilling to go outside of their pre-programmed scripts. I feel like I am talking to robots! I am getting very discouraged.... They seem to get ruder with every call. I wonder if they have me "flagged" as a trouble maker.

Maybe I should just bite the bullet and fill out the financials on paper and fax it in?????

Thank you for your help and thank you to this forum and everyone who is trying to help.