My home expenses are 38% and got denied

[smedinabohorquez]

38% of my income goes to my home expenses (as calculated by de Consumer Credit Council), and Chase denied my loan modification application because my home expenses were under 31%.
How should I proceed? I was never assigned an officer or talket to anybody at Chase, I called to aske about the status and foun out about this.

[Moe Bedard]

Are you mortgage payments on your first lien alone including Principal, Interest, Taxes, and Insurance..........more than 31% of your gross income.................that is what they are looking at...........

here is the link to the estimator so you can see if you are eligible.........there is also the FAQs about the program on the right hand side..........
Making Home Affordable - Payment Reduction Estimator

[smedinabohorquez]

Thank you for the info

[ZAP09]

I am a new member, and reading away. I am very confused when yesterday (after 6 mos.) of waiting I heard from Wells and they offered me a 3 month reduction in payment and said that during that time I should work on my "numbers" on my expenses and income and then reapply for a modification or repayment plan. Apparently my monthly deficit is preventing me from getting a modification? While the current mort. pymt represents 62% of my monthly income. Does anyone know what the numbers need to say to qualify, and if I was "breaking even" why would I need a modification in the first place?

[tigermom]

I have the same question. Mine Mortgage Debt to Income came out the 57% and I just completed and faxed my paperwork.

So, regarding the previous post at 62% and mine at 57%, are we to assume that we will not qualify?

I now receive social security and have never been late. I pay my mortgage before I eat!

Thank you for this board!

[Moe Bedard]

it doesn't mean that you will not qualify.............it just means that they may require HUD counseling................


The Back-End DTI is the ratio of the borrower’s total monthly debt payments (such as Front-End PITIA, any mortgage insurance premiums, payments on all installment debts, monthly payments on all junior liens, alimony, car lease payments, aggregate negative net rental income from all investment properties owned, and monthly mortgage payments for second homes) to the borrower’s Monthly Gross Income. The servicer must validate monthly installment, revolving debt and secondary mortgage debt by pulling a credit report for each borrower or a joint report for a married couple. The servicer must also consider information obtained from the borrower orally or in writing concerning incremental monthly obligations.

Borrowers who otherwise qualify for a modification under this program, but who would have a post-modification Back-End DTI greater than or equal to 55%, will be provided with a letter stating that they are required to work with a HUD-approved counselor and the modification will not take effect until they provide a signed statement indicating that they will obtain counseling.

[tigermom]

Thanks ***!

I will keep my fingers crossed, and will update asap!

[henkelhouse]

So Chase (or any bank) are looking at 31% of your monthly gross or your net income?
It's confusing because if you are in too much deficit then you probably wont qualify but then if you have a surplus of just $400 then you may not qualify. My question is....on the application does your expenses need to be more than your GROSS?

[MyHAMP]

Originally Posted by henkelhouse

So Chase (or any bank) are looking at 31% of your monthly gross or your net income?
It's confusing because if you are in too much deficit then you probably wont qualify but then if you have a surplus of just $400 then you may not qualify. My question is....on the application does your expenses need to be more than your GROSS?

For HAMP, it's 31% of the borrower(s)'s GROSS income.

[imlars]

Originally Posted by henkelhouse

So Chase (or any bank) are looking at 31% of your monthly gross or your net income?
It's confusing because if you are in too much deficit then you probably wont qualify but then if you have a surplus of just $400 then you may not qualify. My question is....on the application does your expenses need to be more than your GROSS?

HAMP is the only modification in which it is okay to have a small deficit. $400 is too much of a surplus, the lenders consider $100-$150 per month as acceptable surplus. Anything larger than that and you may end up with a temporary repayment plan that will raise your payment.
There are certain expenses that the lender will disallow or adjust to what they believe is the average consumer amount.
If you really need help, your figures will speak for themselves, but this is not supposed to be an opportunity for those who want a lower mortgage payment to take advantage of the system. If you have a $400 per month surplus you don't need help and could be taking it away from someone who really does.
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[Hopefull2009]

If you have a $400 per month surplus you don't need help and could be taking it away from someone who really does.

That's just such a wrong statement to make. Can we assume you don't live in a state that requires you to run your furnace everyday because it's 10 degrees out? A $400 surplus does not render you not in need of help.

[davephx]

I believe the budget for HAMP is only a minor part of the NPV Test. It is used more seriously in some traditional mods.

[MyHAMP]

Originally Posted by davephx

I believe the budget for HAMP is only a minor part of the NPV Test. It is used more seriously in some traditional mods.

I can confirm that. We didn't even have to come up with any kind of "budget-plan" while applying for HAMP.

[imlars]

Originally Posted by Hopefull2009

That's just such a wrong statement to make. Can we assume you don't live in a state that requires you to run your furnace everyday because it's 10 degrees out? A $400 surplus does not render you not in need of help.

I am telling you the way the lender sees it. If you have alot of money going to certain utilities, add up an entire years worth of bills and divide it by 12 to get your monthly average. Use this as your monthly utility expense. Try to break even or at least have a small surplus, as in $100-$150.
If I owed you money but wasn't paying you and you found out I had an extra $400 per month you wouldn't have much sympathy for me would you?