loan modification for 1099 Help (insurance, interest rate, escrow, approve)

[salmasaqib]

I am trying to get loan modification and want to know what might be helpful for me while filing the application.

I live in jersey city/NJ.( father of one kid and other one on his way)

My Condo value went down almost $60,000 since I bought .Taxes are higher and my interest rate is $5.75.

I am 1099 consultant and I get $60,000 (as gross) per year.
My monthly mortgage payment ( mortgage+ tax+ home maint) $ 1900.
Would I be able to qualify for loan modification.

I have a lot of other debts plus monthly exp as well.
As when u fill application they ask you to give the net income. How will I calculate my net income, I don’t pay taxes until @ the end of year. And its also said your exp should be more than 31% ? is that figure correct. What is the formula to figure out debt to income ratio as 1099 consultant. I don’t want to file application and get denied later. As a lot of people saying that you have to be very careful while showing the expense as if they are higher than some certain limit , bank won’t approve loan modification and will refer you to foreclosure. What is that % . And as bank also ask for recent taxes and I don’t want to show too many exp in tax filing they might reject it for less income.

I know my question is very confusing, but I am sure some of you must have the answer to it .

I would really appreciate you response.

Please give me idea what should do and if u need more info I can help you.

Thank you

[Modification Specialist]

Note -

When the 31% calculation is used - this is to a HAMP modification using your Personal Gross Income. If you have an FHA loan, this calculation does not apply.

A Profit and Loss statement from your business - after your business expenses are deducted, this is the amount for your Personal Gross Income.

One of the requirements for a HAMP modification. If you you were late during the 12 months preceding your application, you will get denied. If you were on-time prior to the application, your checking account bank statements will need to match what you are showing for income. A required form you will be required to sign is a F4506T, as well as sending in 2 years previous tax returns.

If you are behind on your payments an important note. Since you are connected to the loan your Lender gave you, they are not required to inform you of their intentions once you go into default. If you do not show enough income, they can move towards foreclosure. If you are showing enough income, and still missed payments, depending on the amount of payments missed, they can move towards foreclosure as well.

Example - last night I spoke with a lady in Ohio that was 2 year in default of her payments. Her husband self employed last year earned $88,000 = monthly gross income $7333. His income fluctuates month to month, so there are times with no income coming in. This was their hardship. She said her mortgage company just started them on a payment plan of four smaller payments, she was concerned that her payments were not being applied to their loan. Their taxes and insurance where included in their payment.

Right away there is a problem - after a person goes late, the main account is frozen and the 2nd Suspense account is set up. This is like a bottomless well where every month the normal payments, interest, penalties, taxes and insurance go into, each month this goes deeper and deeper.

If payments are not made - a mortgage company in order to prevent a Government auction to reclaim taxes (they are always in a silent 1st lien holders position), they will pay the taxes to remain 1st ownership to the property. In this case - there was probably enough money in the escrows to pay the taxes the 1st yeear, but the 2nd year the Lender paid them. It is very clear what the Mortgage company was doing - they are looking to reclaim what they paid for there taxes, and the home owners are going to receiving a demand for one lump payment ($50,000) to be paid, or the property is going to be sold.

People think there are laws governing banks concerning their loans. Many people make the mistake trusting their Lender - not understanding a mortgage company is all about profit. The rules are written on the Loan Note. If the borrower defaults the bank is in control. If the loan is not producing profit, they get rid of it. This year I am seeing more lenders moving towards foreclosure rather than helping out the homeowner.

By having an experienced 3rd party not connected to the loan. This allows for a higher level of negotiation at then you can get dealing by yourself. If you are doing this on your own - make sure you have a verifiable hardship and enough income to qualify for a modification.

Good Luck