Positive in income qualifies for a loan modification?

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I’ve been denied for a loan modification 3 times now by the investor, my mortgage servicer said the reason is “deficit income.” The deficit income is after I included my mortgage amount (if I had pay it) and others bills versus our income. I’ve missed about 9 payments, then I paid $ 900/month for 4 months due to a forbearance payment plan when I went on disability leave, after the 4 months, I submit a new mod. package, and it was just recently denied (3rd time). I’ve asked the rep that I have to have a positive income to qualifies for assistant? She said my investor does not participate in loan modification and therefore does not decrease interest rate or extend the term of the loan. I then said so it won’t help me at all to lower my payment, the rep said if I have a negative, they can’t really help. It doesn’t make sense to me. Please advise on how much positive to qualify for them to consider helping me. What if they said I have a positive income and won’t decrease the payments that much? I have no hope on this investor since every time they said my investor doesn’t do loan mod. Should I just gave up and request for a short sale before they set an auction date (which is anytime now)? Thank you for your advise.

2 Comments
  1. Reply
    Gaytheist Buddha
    April 29, 2011 at 11:14 pm

    You need a mortgage debt ratio of no more than 31% and a total debt ratio of no more than 41%.

  2. Reply
    Santa Clara County Realtor
    April 30, 2011 at 12:09 am

    The stats for banks doing loan modification is dismal. Chase did permanent loan mods on only 5% of the people who requested then in 2008. B of A did 84 loan mods! Most bank haven’t documented their numbers, but from the 2 I gave you, you can tell it’s pretty low odds.

    Find out what is better for you, a loan mod or a short sale. Depending on your individual situation, one may be better then your other.

    Take your loan papers to a lawyer and find out if you they are recourse loans (can the bank come after you for the deficiency?) Ask him/her how the state works and if your state is a non-recourse state.

    Talk to an accountant about your tax liabilities both federal and state?

    You want to understand how much you’ll be liable for in both cases.

    Good luck.

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