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Profit and Loss and HAMP or MHA

Discussion in 'Loan Modification' started by Chadd, Nov 17, 2010.

  1. Chadd

    Chadd LoanSafe Member

    I have already filled out this form but Im not sure its in my best interest to fill it out the way I did. Im self employed so I do have the luxury to report accordingly.
    My mortgage is $3800 a month. What should I say my gross income is? I will find out hopefully tonight if my lender is even offering a hamp or mha loan mod.
    Any advice is greatly appreciated.
    Thank you
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Hello Chad,

    Since you are applying for the HAMP program your current monthly payment must be more than 31% of your gross monthly income. Whatever your true income is, to qualify for HAMP your payment must be above this amount..
  3. TomEason

    TomEason LoanSafe Guide Staff Member

    Chadd, You may not have "the luxury to report accordingly" that you mention. I'm also self employed, and here's what I've discovered about how underwriters, specifically at Chase, corroborate the earnings you report on your P&L. They use your bank account statements, specifically the deposits, and if the amount of your deposits doesn't come close the gross income you've reported, you are likely to be denied due for insufficient income. On the other hand, it's easier to under report to get over the 31% DTI.
  4. Chadd

    Chadd LoanSafe Member

    Okay Thank you.
    Well Im sure if they looked at my bank statements lately all that they will see is withdraws,lol. But thats good to know.
  5. imlars

    imlars LoanSafe Member

    The servicer doesn't just take your word for what you put on your P&L's, they want corresponding bank statements and 2 yrs worth of complete tax returns to verify your figures. $3800 is approx 31% of $12,200. If you gross less than $12,200 per month, you are paying too much for your mortgage.
  6. TomEason

    TomEason LoanSafe Guide Staff Member

    I agree with your statement. In the words of a Chase negotiator "bank statements don't lie." Whereas, occasionally tax returns that are submitted, may be phony.
  7. Chadd

    Chadd LoanSafe Member

    yeah i do gross less then that now. About $7000 a month. Maybe $6000 by next month at the rate things are going.
    True. But I didnt deposit all the money I earned into my bank account, I still earned that money and payed taxes on it. So how can they discredit my tax returns if my bank statements dont show that much deposited.
  8. TomEason

    TomEason LoanSafe Guide Staff Member

    The loan servicers' underwriters do what loan underwriters do - look for documentation supporting and documenting your income. If you have an explanation that you believe will satisfy the underwriter, then you may have a chance. However, it's unlikely they will accept an explanation that you keep $$ thousands in cash laying around.
  9. Chadd

    Chadd LoanSafe Member

    I can prove through receipts that my income is valid. The majority of my clients pay cash and in return I pay cash for most of my expenses. Also its not like money is ever just laying around.

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