LMIB. RATE REMOVED!

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  • #78523
    1goldenjewel
    Participant

    Hello,

    I am back again. I really need help. I recently received a COC -Change of Conditions Explanation saying that I am no longer qualified for the LMIB due to my income being over the average amount. However, I when I did my calculations my income is UNDER the average LMIB amount as shown on my Uniform Residential Loan Application. I contacted my MC and she stated that BOA does their income differently and due to my depreciation my income came back higher and so my Income came back higher causing me to lose the LMIB rate and my mortgage amount increasing and it is now higher than my budget shown on NACA AFFORDABILITY FORM. I am just not understanding this. I asked my MC would I need to resign my Disclosures since there is a change in my income found and she stated that I did not need to sign anything again. I am very curios as to why isn’t there a change of the income of the higher amount shown on my new/current Uniform Residential Loan Application because it still shows my income being the same which is under the LMIB Average rate? Is there anyone else I can have to look over my files other than my MC who is also the Office Director? I really need help because I am confused! I also contacted a number on my BOA disclosure cover letter to gain clarity about the income part and they found a higher income versus the one NACA has and if it is higher why isn’t is shown on my current/new Uniform Residential Loan. Please advise on who can I have to help me or double check my files. This site has been so helpful. I just crossed the hurdle of having the principle reduction of 15k removed because it was not supposed to be there. Please help.

    Thank you in advance.

    #78524
    Nelsont
    Member

    The first thing you need to do is verify your income before and after the change. Make sure you do not include overtime or performance based bonuses. Use your base rate of pay without any shift differential if there is any. Don’t include other streams of income such as alimony or child support without a court order. Don’t include part time jobs or additional full time jobs without 2 years of W2s.

    The next thing you need to do is ask your MC via email, copy your naca lynx email address too, to clearly breakout exactly how your income is being calculated and how that differs from BOA’s calculation.

    Lastly your loan estimation will not change until after the COC is completed, submitted and verified, which will start the underwriting over. You need at least a month’s worth of documented evidence of this new income (generally pay stubs) so without knowing your details it’s possible that has not yet been reviewed which could be why it hasn’t shown up on your loan info yet.

    #78525
    PJM
    Participant

    Let see what Tim Trumble has to suggest about it. You may address that situation directly to him.

    #78526
    1goldenjewel
    Participant

    Hello,

    I have contacted my MC with my NACA lynx email attached asking her to explain or show how my income was higher. My MC called me stating that BOA does their income different from NACA and that due to depreciation my income was found higher she has not shown me how BOA came to the conclusion of my income being higher. I am Self employed I receive a 1099k annually. In order to to get my income they did the average of my tax returns year 2019 and 2020 so there was not a change in my income and my son receives Survivors Benefits due to his father being deceased. My income has not changed. However, I did everything you mentioned and I did not include the survivors benefits and my income is still showing no change. I will email my MC again and tag my NACA email asking her to provide the details showing how BOA income differs from their income. I also contacted a number on my BOA disclosure cover letter to see how their income came to a higher amount but I they have not contacted me back yet. Is there anyone you can recommend to double check my files.

    #78527
    1goldenjewel
    Participant

    Breakdown: after averaging my income for the year 2019 & 2020 based on my tax returns my monthly income is $3092 and when you add my son’s Survivors benefits of $1097 per month my income is $4189 which is below the average LMIB amount. When I logged into my NACA webfile there was a condition (which I no longer see) saying the lender found my income at 3800 plus my son’s 1097 but it never said how they got that. But still after doing my calculations I am still coming up with a monthly income of $4189! My MC has not provided a breakdown of what BOA has to prove how my income was higher. I really need help on this.

    #78528
    Nelsont
    Member

    At this point they will likely be using 2021 income and 2019 might not be needed/used.

    BOA will not likely contact you back. BOA’s naca division is a separately run department and it is an unlisted, closed loop. The BOA naca department does not have visibility to BOA loans and BOA does not have visibility to naca loans. The naca loan numbers are not recognized by BOA’s system because they are different. Once you close you will be reassigned a new BOA loan number. Until then the system is designed to keep your MC as the point of contact.

    #78529
    1goldenjewel
    Participant

    Hello,

    I have not filed my 2021 taxes yet. So I am not sure how they would have used my 2021 income.

    #78531
    1goldenjewel
    Participant

    Hello,

    Is there anyone you can refer me to speak with that may help me with this matter since I am not able to speak with anyone at BOA?

    Thank you.

    #78533
    1goldenjewel
    Participant

    Hello here is my email and the response from my MC a few minutes ago.

    Me: Hello,

    Is there anyway that you can provide or show a breakdown of how BOA got the higher income amount of the 3800 for me. It’s very bizarre because when I did my calculations I am still getting the $4189 which is under the average LMIB. I am just curious to know their figures because when I did the loan with Ameris bank their figures was $4189 as well.

    MC: Total income is average of $4,341. Social security income of $1,097 and Sch C income of $3,800 (after adjusting for depreciation and business use of home) are above the average.

    Your deprecation for 2019 and 2020 IRS tax return divvied by 24, then add the to $3800.00 + SS income of $1097.00, total income is over

    ————————————
    I am still confused as this does not make since. Please is there anyone you can refer me to speak with to double check my files.

    • This reply was modified 7 months, 2 weeks ago by 1goldenjewel.
    #78565
    TTrumble
    Member

    Hello 1goldenjewel,

    The difference seems clear: You do not appear to be adding depreciation back into your net profit and thus your income, and the add-back is what is taking you over the LMI threshold.

    NACA’s Polies and Procedures Manual states:

    “Average the income reported from the most recent two (2) years tax returns. Add back depreciation to the net profit before calculating since this is an accounting process that does not affect cash flow. If the income from the preceding year is greater than the most recent year (income declining) the income must be underwritten to the most recent year only (12-month average – i.e., most recent year income divided by 12). Documentation Requirements: The most recent two (2) years filed federal income tax returns (IRS Form 1040) and accompanying schedules or the IRS transcripts of the 1040s.”

    Tim Trumble
    Online Operations, NACA

    #78570
    1goldenjewel
    Participant

    Hello TTrumble,

    Does the same still apply if the income from the preceding year is lower and the most recent year income is greater? My income for the preceding year was lower than the most recent year. & Thank you so much for responding. This forum is extremely helpful and has educated me in soo many ways.

    #78672
    TTrumble
    Member

    Hello 1goldenjewel,

    Again, as the manual states, “Average the income reported from the most recent two (2) years tax returns.” If you are averaging two years’ income, it does not matter which year was higher or lower since the result is the same either way.

    Tim Trumble
    Online Operations, NACA

    #79975
    Precious1ne
    Participant

    This scares me.. I am already in the mortgage stage waiting to close in November on a new construction and I just got a salary increase. The salary increase is over my initial qualification status (LMIB) as a priority member so will this affect my rate and/or priority status when I get to closing?

    cc: @TTrumble

    #80082
    TTrumble
    Member

    Hello Precious1ne,

    That, very simply, is a question for your counselor.

    There’s a couple of potential file-related variables, so your counselor is the person to ask.

    Tim Trumble
    Online Operations, NACA

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