Including Unemplyment as Income for loan mod..

[miked2023]

I'm submitting my proposal to BofA this week and they obviously want documentation of all out income. Problem is, my wife is on unemployment and seeing as we're going to have a baby next year, she's not exactly that employable. Therefore, we're not really counting on that money for our budget beyond what she gets until it runs out. How do we explain this to them properly? I'm tempted to just not include it as income (we could never qualify for a loan using this as income in the real world, why now?) but I fear they will find out somehow. Bottom line is, I don't want them making any offer to us using her unemployment as income seeing as it's only temporary. Any advice is helpful. Thanks!

[Hopefull2009]

Probably a lot of "what ifs" in your case. For instance, was your wife on the original mortgage with her income? What is your "hardship" for modification purposes? Will your income alone even support a mortgage payment? There are a lot of "ifs." Unemployment income will be counted and usually requires assurance and documentation on how long it will last. As far as her not going back to work after the baby, that would be a personal choice and not exactly a financial hardship in terms of a mortgage payment. As far as leaving it off and not reporting it, I don't think anyone here is going to advise that as it could be conceived as fraud - that would be a personal decision and/or choice. Can they find out? Well, was it claimed on income taxes? They will be looking at that and you'll need to sign a 4506-T so they can pull your most current tax transcripts.

[Here's Hoping]

Hi Hopefull...

"Unemployment income will be counted and usually requires assurance and documentation on how long it will last." This is one of my hopes, because it makes a significant difference in our monthly income. I had heard that unemployment income is not counted. Our lender/investor is BofA. Any insight as to their requirements? We just submitted our hardship and are in limbo currently. Hubby's unemployment claim is good through 7/11/2010 and he has supplemental unemployment through the Union. Thank you.

[miked2023]

She was on the original mortgage and used to make good money. She's gone through two careers during the housing/financial crash and currently has no job. That, coupled with a mortgage payment that's about to adjust (going up over 1K) is our hardship. My income could support the mortgage with a decent loan mod that we are proposing. I'm not counting on her unemployment money for anything and don't would rather it not be factored into our loan mod because after the baby she definitely will not be working for a little while.

I'm don't want to defraud anyone, I just don't want that income being used against me as it is temporary. She just got her first check last week, so it's not going on any tax returns etc. yet. I'm not against disclosing it, but once they see it I'm afraid they'll go, 'see, you can afford this house!' which is just not true. because she's not working right now, we're also not paying for daycare which was costing us over 10K a year. It's just a slippery slope once I report it and don't want to confuse the issue.

Ideas?

Thanks for your replies.

Originally Posted by Hopefull2009

Probably a lot of "what ifs" in your case. For instance, was your wife on the original mortgage with her income? What is your "hardship" for modification purposes? Will your income alone even support a mortgage payment? There are a lot of "ifs." Unemployment income will be counted and usually requires assurance and documentation on how long it will last. As far as her not going back to work after the baby, that would be a personal choice and not exactly a financial hardship in terms of a mortgage payment. As far as leaving it off and not reporting it, I don't think anyone here is going to advise that as it could be conceived as fraud - that would be a personal decision and/or choice. Can they find out? Well, was it claimed on income taxes? They will be looking at that and you'll need to sign a 4506-T so they can pull your most current tax transcripts.

[miked2023]

anyone else care to chime in on this? need to get this out this week. Thanks!

[orchard]

my experience with wells fargo is that unemployment is not considered, but i believe it depends on your investor. i would certainly reveal it and also reveal when it is scheduled to expire.

[Here's Hoping]

"... I fear they will find out somehow. Bottom line is, I don't want them making any offer to us using her unemployment as income seeing as it's only temporary."

I'd follow that fear, just be honest and upfront that it's only temporary. IMO it's not a good idea to withhold information. I hope it goes well.