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I'm Fuming Right Now - Inflated Incomes


midwestrebecca
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The last post in this topic was posted 4871 days ago. 

 

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I'm really angry right now...angry at myself and angry at the broker who we worked with. Four years ago crediboards was my salvation at answering my credit issues and rebuilding my credit. Our credit was flawless for two years and then we decided to buy a house. We still owned a another house but felt we could easily sell it....besides our mortgage broker said we would have no problems at all paying for two mortgages until we sold our first house.

 

Well the market took a dive and we still own the house (two years later). We were really stupid for buying a house without selling our first one....but that is another story.

 

Now our first house is in foreclosure and we are barely able to make our payments on the one we live in now. We just found out there is an organization that will help us with getting our mortgage company to lower our interest rate (on the house we live in now). They are non-profit and will do this for free. So we made an appointment for later on today.

 

We were told to bring our mortgage documents in. So last night I was glancing over them and was shocked that our incomes were listed as $92,000. This is $40,000 over what we actually make. There was no way the mortgage broker could have gotten this wrong. We submitted our income tax records and my husbands pay stubs. How can someone make a mistake of $40,000?

 

The mortgage was in my husbands name and I was stupid enough to trust that he would look over the documents. Well he looked over some info but failed to miss the income figure.

 

So now my husband is on the couch and I am fuming. I know we are to blame for not reading every word on the documents. But isn't the broker to blame for inflating our income? This is deceitful and unethical.

 

We should never have gotten this second house. If only the broker had taken our actual income....he would have denied us and we would still have great credit.

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Not being critical.....but why woud you let someone else tell you what you can afford?

 

You can file a complaint with your state's AG office...the broker(if he/she is still in business) has comitted a crime.....and should be punished....it sounds like he threw away your income docs and over inflated your income.....however at the same time.....your husband did sign the papers....and not reading them is not a valid excuse...so there may be some civil and or criminal penalties as well.

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My guess is that your husband knew, and at the time all that your broker saw were dollar signs, as such, I am sure you would have seen the same thing. If your income was 52k, then even you knew that you couldn't afford 2 houses without seeing it on paper. My income is 87k, and I can barely afford one. By filing a complaint you could also be doing your husband harm, so you may want to be careful about that.

 

Move on, and let the house go. It is not worth losing your marriage over. You both made the decision together, so stick it out and work through it. Pay on your current house and let the other one become a statistic.

Edited by llenod
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It sounds like you did a stated income loan where no income documents were required - This was abused by many and part of the overall problem that we have today. People bought more than they could afford.

At this point I am not sure what you can do. Like others have said the fact that it was signed by your spouse makes him a party to the issue.

I also agree that you need to try to channel your frustration elsewhere.... I am sure at the time you discussed what you were doing and both agreed to it.

 

Good Luck I hope it all works out

Brian

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Lenders have never had the burden of telling people what they can afford for a loan.

 

 

Lenders decide what they are willing to lend. They do not care if you want to buy a car, or have retirement funds, or save for an emergency or even pay for groceries beyond water and bread.

 

 

 

Lenders decide what they will lend.

 

 

 

You decide how much of that you want to borrow.

 

 

 

 

 

 

 

 

 

 

 

Report your broker. While law enforcement is sometimes willing to go after constant and flagrant abuses of the law, it is much less likely that they would prosecute your husband for fraud. Although they certainly can.

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Everyone here is saying to report the broker but if they signed to docs 4 years ago how could they prove that it was the broker and not them that overstated the income? Not saying by any means that if it was the broker who did this it was right to do so and he should be punished I am just curious how they would prove this.

 

Also, it is always on the borrower to know how much they can afford not the broker to tell them. The broker just tells the borrower the amount the lender is willing to lend to them. In 2005 when I bought my house I was approved for almost $100,000 more than my current loan amount which I knew at the time was crazy so I kept within the range I was comfortable with and not what they were willing to lend to me.

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I'm really angry right now...angry at myself and angry at the broker who we worked with. Four years ago crediboards was my salvation at answering my credit issues and rebuilding my credit. Our credit was flawless for two years and then we decided to buy a house. We still owned a another house but felt we could easily sell it....besides our mortgage broker said we would have no problems at all paying for two mortgages until we sold our first house.

 

Well the market took a dive and we still own the house (two years later). We were really stupid for buying a house without selling our first one....but that is another story.

 

Now our first house is in foreclosure and we are barely able to make our payments on the one we live in now. We just found out there is an organization that will help us with getting our mortgage company to lower our interest rate (on the house we live in now). They are non-profit and will do this for free. So we made an appointment for later on today.

 

We were told to bring our mortgage documents in. So last night I was glancing over them and was shocked that our incomes were listed as $92,000. Is your income all w2 or is there some self employment?? What was your debt ratio at the time of purchase....the final application ie how the file was underwritten....may have different numbers on it than the original application....keep in mind that at that time you would have been allowed a 55% back end debt ratio with a good mortgage history reporting.....it's highly unlikely that w2 income would be over stated by that amount.... This is $40,000 over what we actually make. There was no way the mortgage broker could have gotten this wrong. We submitted our income tax records and my husbands pay stubs. How can someone make a mistake of $40,000?

 

The mortgage was in my husbands name and I was stupid enough to trust that he would look over the documents. Well he looked over some info but failed to miss the income figure.

 

So now my husband is on the couch and I am fuming. I know we are to blame for not reading every word on the documents. But isn't the broker to blame for inflating our income? This is deceitful and unethical.

 

We should never have gotten this second house. If only the broker had taken our actual income....he would have denied us and we would still have great credit.

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it was a w2 and then stated for my business. I have a very small home business that makes hardly anything. There is no way that we stated that much income from my business....no way at all.

 

I do know there is nothing we can do because he signed the papers. We are going to use this experience to learn from it.....but that doesn't me any less aggravated I trusted this broker.

 

And by the way the broker was from this board.

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it was a w2 and then stated for my business. The business must have been in his name as well...if it wasn't then there would not have been anyway to prove he was in business...and the income couldn't have been used....

I have a very small home business that makes hardly anything. There is no way that we stated that much income from my business....no way at all.

 

I do know there is nothing we can do because he signed the papers. We are going to use this experience to learn from it.....but that doesn't me any less aggravated I trusted this broker.

 

And by the way the broker was from this board. It doesn't matter where the broker is from.here or Mars.....there is something missing from this story.....

 

What where your debts.......at the time of the purchase........what did your income tax returns show as income at the time of purchase? What was the purchase price? Taxes etc......If you provide the answers we can tell you if you would have gotten a full doc approval or not....and chances are it was full doc but the initial application was done incorrectly.....having said that....before you cry wolf.......are there ANY emails to said broker which claimed current income was higher than previous years income? If so then the broker did nothing wrong...and if tax returns where provided......was your net income on your schedule C enough using the avg of 2 years......to support a DTI of less than 55%??

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Faannie Mae was going up to 65%

 

 

OP lesson learned - Like I have said in many emails there are many that took part in running this market and in some way all that had something to benefit are to blame. From Brokers to borrowers, Realtors, Appraisers, lenders investors that bought MBS........everyone was rolling in it until the bubble popped.

 

I know better than to point fingers and or blame in any one direction.

Not to say that anyone is innocent........

 

Had it not been a stated loan it could have been a True No Doc or a no ratio loan. With what you described you would have qualified for a no ratio loan which disregards DTI just show you have employment and good credit maybe some reserves and you qualify.

 

I am presonally glad to see those days behind us however now the self employed are victims to the abuse as those programs were initially set up for them. Verifying Self employed income has always been difficult as they are allowed so many tax benefits from owning a business.

 

Now if someone qualifies for a loan they actually qualify

 

Good Luck Moving Forward

Brian

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....

 

And by the way the broker was from this board.

 

 

You keep saying this. Why? If you were trying to protect others, you would surely tell exactly who this person is.

 

 

I agree with Cedric. There is more to this story.

 

Agreed. You can't come out calling shenanigans and not finish the story. You built the firepit and we demand a body to burn. :):lol:

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While you might want to blame the mortgage broker, honestly, if it was a no doc mortgage, and the husband now admits to forgetting to look at the stated income level, perhaps he also forgot that he might have mentioned that his wife's business makes $50K/year?

 

Not saying this is what happened. Only saying that it can easily HAVE happened. So I think that I agree with Brian - I don't really care what a mortgage broker did 4 years ago when nothing was regulated. I don't want to call for someone to go out of business. I think that this can be another case of lesson learned, and that someone who really couldn't afford a particular mortgage shouldn't have taken it out in the first place.

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Honestly, if she was telling the whole truth and this was a stated loan where the broker made up an income without the husband's input (since she wasn't even on the loan), then I'm sure she wouldn't be using a new moniker (newbies - 3 posts; when she's used creditboards in the past). Perhaps if she named the broker, then the broker could prove the fault lies with the borrower & she wouldn't be a victim anymore (as much of one you can be when you sign the mortgage dox with your own free will).

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On face value, it seems more like a deal gone bad. I am sorry, 52k a year doesn't cover two homes unless they are 50k each. You don't need a DTI calculator or a broker to tell you that. A 52k/yr salary is going to pay rent/util/car payment/ & food. This is another example of someone watching the Mainstream Media, where you have pundits blaming the brokers. Sure, there were bad brokers, but you are still signing the paperwork. If you don't understand it, hire a lawyer who does. Is there any personal responsibility left anymore???

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It is a shame that it was someone for this board, but the truth is that some brokers did abuse the system. However, why would you listen to anyone tell you that you could afford two house payments? It is a tought lesson to learn.

 

Nevertheless, exhaust the resources that are out there to help you: Loan modification, short sale, investors who can bring your note current, etc.

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We still owned a another house but felt we could easily sell it....

 

Problem #1.

 

Well the market took a dive and we still own the house (two years later). We were really stupid for buying a house without selling our first one....

 

And #2.

 

Now our first house is in foreclosure and we are barely able to make our payments on the one we live in now

 

Numero tres.

 

The mortgage was in my husbands name and I was stupid enough to trust that he would look over the documents. Well he looked over some info but failed to miss the income figure.

 

Four.

 

And finally....

 

We should never have gotten this second house.

 

Why buy a second home when you can't afford the first (see #3)? Speculating? Beach/summer vacation home?

 

No matter. Lesson learned.

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OP I trully feel bad for you but...

 

Why blame the broker or anyone?

 

Its a matter of personal financial resposibility. You know what you make and what you can afford. The broker is in it for commission only!!! The broker doesn't care if you can afford it or not. My home was foreclosed on after 12 years of everything being great. My situation is different as in every instance it varies so I can feel your pain but you have to move on. Don't blame anyone. You know what happened you couldn't afford it, plain and simple and thats OK we all make mistakes.

 

The whole economy is going through a cleansing period. Its the era of "GET REAL". It started with Enron and it hasn't stopped. Its pretty simple to understand its like playing a card game and the chips you are playing with doesn't match the cash in the pot. Just like the economy there is not enough cash to cover the loans made. It was bound to happen it has been a period of financial irresposibility from the lenders, brokers, and the potential home owners. It sucks!!! But it is what it is.

 

I wish you and your family the best. There is a light at the end of the tunnel and most importantly "family first". I know that this is a very hard time in your life and you will make it through. Good luck to you.

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