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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127680  
Subject: Re: FYI: When Rules Collide Date: 7/14/2013 12:22 AM
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Nonsense. Clearly, you know nothing about the mortgage industry.

Please.

How often have you had an underwriter ask for some extra piece of documentation just because the data in the file was a couple of immaterial dollars over or under some threshold number.

Perhaps it was my favorite situation from last fall.

Husband has a W-2 job making about $200k a year. Wife does a bit of tutoring on the side - mainly to keep busy - grossing about $10k a year and netting about $8k. They're refinancing a $150k mortgage that's about 50% LTV. Sounds like a slam dunk to me.

But there's that nasty schedule C on their tax return. So that means they need a letter from their tax preparer - me.

The wife's business income is not needed to service the loan. The husband's income is more than sufficient. The wife's business is also one that is not likely to generate large losses which would impact their ability to repay the loan.

If a thinking person were making this loan, they'd make a couple of notes in the file along the lines of my comments above and move on. However, the automated systems at Fannie and Freddie demand that there be a letter from their tax preparer in the file any time there is a business on the return.

THAT is the difference between documenting a file and thinking about the borrower.

--Peter
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