Small business income & Loan Modification

[needinganswers100]

I am amazed at the support you all give folks who post on this incredibly useful site. These are tough times and this website is a God send: Can you kindly guide me here?

My details:
Primary mortgage - Wells Fargo. Balance: 85,701. 6.75% - 964.00 month.
(Includes about 225.00 escrow.) Fixed rate.

Secondary mortgage - 7.74% - 607.00 month. Fixedrate. Wachovia - Balance: 64,903.

I've been current on both loans for 4 years (fell behind in '03.)

My wife and I are separated as of August of '08. I am a single parent of two. My wife's income no longer goes toward my household expenses. I have a small business.

Last year's return had AGI of about 35,000. (my income and my wife's) We are filing jointly again this year.

1. I would like to conduct a modification of both loans without my wife on the mortgage. (My wife is not currently named on the mortgages.) My gross ("gross receipts") business income alone is approx. 5000. a month. My business AGI might fall in at about 25,000 this year.

2. I am hoping to work through NACA to have a modification with Wells Fargo. (I want both loans combined.) Another counseling agency determined 38% of my income is going to house payments. (I have the counseling agency budget report.)

Am I right to assume I may be eligible for the Obama loan modification program? Having business income makes this process confusing for me.

Thank you all!

[Moe Bedard]

Hi,


Welcome to the forum and thank you for joining..................

The Home Affordable Modification plan criteria has a target of getting the mortgage payment down to 31% of the gross income..........and doesn't include the second in this equation..........it looks like you are below what the program is trying to get the payment down to.

here is the link to the guidelines..........

http://www.treas.gov/press/releases/...guidelines.pdf


The borrower’s Monthly Gross Income is the amount before any payroll deductions includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payment, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance polices, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and other income.



You can either continue to try NACA and see what type of restructure they will be able to do after looking over the financials and their services for the Home Save modification are free.............

or take a look at what the FHA refinance is going to be able to accomplish and then make the decision from there, when you are able to see both options, and go from there.

[needinganswers100]

Thank you *** for your quick reply!

The conclusions of a CCC Counseling center put me at about 38%.

Would my second mortgage with Wachovia be part of the equation with The Home Affordable Modification plan? I thought it was....

(I also thought there were other "housing expense" categories that were included in the determination.

[needinganswers100]

One more PS - For me, as a small business, would "Gross Income" be the adjusted gross income on the 1040?

[Moe Bedard]

The second mortgage would not be included in the calculations for the 31% because the program doesn't have a modification option for the second.........the second lien would need to work something out with you separately.............the second mortgage would be included in the back end debt.

your question about the business income would need to be addressed with the lender..........as they would be able to let you know what they accept for that income.

[needinganswers100]

It has taken me about 7 months to read my reply here. Thank you Mr. Bedard.

One another note, I have doggedly been working with NACA for over a year now and finally my lender is offering me a "trial period" HAMP offer.The offer is only 68 dollar less a month than what I'm paying now. So... I begin another thread asking your conscientious members a new question