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Old 07-23-2008, 01:38 AM
 
Location: Cary, NC
1,036 posts, read 3,725,683 times
Reputation: 505

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Quote:
Originally Posted by goodbyehollywood View Post
They do look at tax returns, but self-employed people write off many "soft" expenses--depreciation and mileage for autos, home office expenses, services, supplies, dues, etc. Many of these writeoffs do not actually reflect an expenditure of "real" dollars, but are passive deductions. Trying to reduce their AGI to lower SE taxes will now keep some of them from buying homes or being forced to buy less of a home than their corporate-employed counterparts.

The SE have been responsibly relying on Alt-A loans for years, with minimal risk of default. Now it's game over for many of them.

Many programs will factor these deductions (depreciation of car/home office especially) back into the income used for qualifying. An experienced underwriter that knows how to read business tax returns will not penalize a borrower for "phantom" losses such as depreciation.

What does get removed is hard costs that truly hit the bottom line. If someone makes 100k but they spend 30k on materials and take 20k in depreciation... the person will have an AGI of 50k but an underwriter will use 70k as the qualifying income.

Part of the benefit of being self employed is the potential tax benefits, unfortunately when you report low income to escape the tax man you can not then claim it to get a big mortgage. I do miss Alt-A, I worked with many self-employed and 1099 borrowers with strong credit/assets but reduced income docs and now their options are far more restricted. If the government has their way, they would legislate away alternative income docs and inadvertently hurt many small business owners.
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Old 07-23-2008, 05:01 AM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,888,303 times
Reputation: 3587
Quote:
Originally Posted by socrates View Post
being on a job 12 months doesn't mean anything. Its not like you can't be laid off after your first year!
I disagree with that. In many jobs you are a probationary employee for the first 6 months to a year. You should be at least 12 months established in your profession (as opposed to a specific job) or the down payment requirement should be raised.
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Old 07-23-2008, 05:02 AM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,888,303 times
Reputation: 3587
Quote:
Originally Posted by Mathguy View Post
I agree with you 100% that specific criteria should be applied such as credit rating.

Redlining has morphed over the years from clearly discriminatory practices to a catch-all for rate differences.

For example, redlining used to be...they won't write policies to blacks (1960's is when the term came out). Pretty clear-cut racism and bad practices.

Today, if you charge higher auto rates in a zip code because of higher theft rates...you can be accused of redlining if that zip code has a large minority presence. Basically, if a minority group is getting higher rates for whatever reason...even if you are using straightforward criteria like credit score, number of accidents etc. it is labeled redlining.
If you are also charging the whites in the zip code the same rates, it is not racial discrimination.
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Old 07-23-2008, 07:10 AM
 
2,197 posts, read 6,814,345 times
Reputation: 1687
Quote:
Originally Posted by rcarrillo View Post
Many programs will factor these deductions (depreciation of car/home office especially) back into the income used for qualifying. An experienced underwriter that knows how to read business tax returns will not penalize a borrower for "phantom" losses such as depreciation.
That's good to know. I've never had deductions factored back in. I've always had to qualify on AGI. But I've generally had conservative loan products. It has become almost impossible for a SE person to buy long-term investment properties, even with stellar credit and substantial cash reserves. Leverage is becoming a thing of the past, even for those who know how to manage it without abusing it.

For some self-employed (especially SPs), the tax penalties outweigh the benefits. Not everybody has a lot of write-offs and home office depreciation isn't always worth taking. And an older car has been fully depreciated. Yet there's still the SE tax.
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Old 07-23-2008, 12:32 PM
 
55,047 posts, read 43,905,213 times
Reputation: 34446
Quote:
Originally Posted by KevK View Post
If you are also charging the whites in the zip code the same rates, it is not racial discrimination.
Yes, I agree it is not racial discrimination.
Unfortunately, it is still called red-lining by community activists (Jackson, Sharpton etc.) as well as by elected officials.

Welcome to Insurance RedLining (http://www.insuranceredlining.com/stop.html - broken link)

And when you give loans to minorities...its "reverse redlining"...sigh.

http://abajournal.com/news/jesse_jac..._intervention/
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Old 07-27-2008, 08:57 PM
 
Location: no
27 posts, read 59,431 times
Reputation: 28
Default your right that you cant fix stupid TEX,you prove it

you ignore the FACT that this is the second time in 20 years that a real estate lead recession has occured.

The last one was from 1981 to 1988 under RAYGUN AND DADDYBUSH

which lead to dadybushboys famouse lie

read my lips no new taxes.

KEEP LYING TO YOURSELF TEX

WE educated liberals proved you are wrong in 2006 when we booted you repub boys out.

And we will do it again in 2008.
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Old 07-27-2008, 09:06 PM
 
Location: no
27 posts, read 59,431 times
Reputation: 28
Default tell it to the lincoln savings and loan account holders

tell it to the homeowners in california

your fuzzy math dont mean crud ref 2 quarters of downtrend.

the forclosures started in 86

lincoln was a double loser

between charlie keeting ripping off people with his bonds

plus the bad loans

keep lying to yourself

I guess your gonna be stupid and vote for mccain.
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Old 07-28-2008, 05:42 AM
 
2,197 posts, read 6,814,345 times
Reputation: 1687
So Obama is going to be able to fund up to $300B in bailouts without any impact to taxpayers? Save banks and prevent a recession without raising taxes or causing inflation? Wow! How exactly?

I'm not debating politics, I'm just asking HOW?
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Old 07-28-2008, 06:33 AM
 
Location: Sitting on a bar stool. Guinness in hand.
4,429 posts, read 5,804,808 times
Reputation: 1708
Quote:
Originally Posted by goodbyehollywood View Post
So Obama is going to be able to fund up to $300B in bailouts without any impact to taxpayers? Save banks and prevent a recession without raising taxes or causing inflation? Wow! How exactly?

I'm not debating politics, I'm just asking HOW?
I don't know? But, because of the high media coverage he got last week for this middle east/European tour. He's planning this week on walking across water and.........and this is an important and he's planning on exorcising the financial anti-christ. Of course we all know this is Allen Greenspan. Not exactly sure how he's going to do that. Something about the Gold Standard........???????? I don't know. Most of the report I read was in Latin.
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Old 07-28-2008, 08:43 AM
 
Location: Texas
4,933 posts, read 6,969,328 times
Reputation: 5506
looks like the commies got their hands caught in the cookie jar. Dodd and about 90% of our congressmen ought to be hung for treason.

Where Are the Ethics Hearings into Countrywide√Ę€™s VIP Loans? at Emac’s Stock Watch | Fox Business (http://emac.blogs.foxbusiness.com/2008/07/25/where-is-congress%e2%80%99s-ethics-hearings-into-countrywide%e2%80%99s-vip-loans/ - broken link)
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