Refinancing Problem !!
here is the situation, i have just tried to refinance my house with wells fargo to pull out $70k.
(my morgage is currently with countrywide, and cannot refi. with them for other reasons). after giving the morgage consultant all the info she needed, she said as long as it appraisers at $287 you'll get the $70k. so i handed over $350 for the appraisal. my house appraised at $306k. so naturally i thought everything was fine, well when they did a verification of income they said it was lower than what they needed. i told them i was a bartender and majority of my income was tips. they said they could only go by what was on paper.
to make a long story short, i can't get the money that i need.
my question is this- shouldn't all verification be done before any appraisal is ordered, because now i have just lost $350 plus the credit report fee. i wish to take this ordeal further but don't know if i have a leg to stand on.
thanks.
What did you originally tell them you make? Did your income change or were you going off tips and there not?
Does the mortgage consultant work for Wells or is she a broker? It's not uncommon that a loan is not approved after the appraisal or "full package" is submitted.
I would go to a broker and have him or her place it with another lender. Maybe use a stated income program this time so you can use your tips as income.
Quote:
On 2004-07-18 21:43, maxwellpropertyinvestment wrote:
What did you originally tell them you make? Did your income change or were you going off tips and there not?
i told them on average i make around $3,500 a month and that majority of that is tips. well, when they did their verification it came in at $2,500. i told them that the hotel i work for has a tip compliance with the IRS, so a lot of my tips go unclaimed as the tip compliance is lower than what i really make, and this is the standard thing in the service industry in las vegas. all she said was that they can only go by what was on paper.
so i would like to know if i can take this further by complaining to somebody and get my money back by her incompetance.
by the way she works for wells fargo as that is where i do my banking and i am sure that i will be seeing her this week.
thanks.
Your broker does not sound very experienced.
1. Many lenders who are using verifiable income would object to the tip income. Your broker should know this.
2. There are lenders who will work from stated income. They charge a bit more somehow (fees, interest rate, other criteria). Your broker should be able to find you such a loan package if she is not tied into WF.
You will likely spend more time then it is worth fighting. See if you can get the broker to do a better job (suggesting alternatives that will work in your situation). If not see if you can have the appraisal retyped so that you can use it with a different lender.
John
[addsig]
The broker is not experienced. You need a stated income program.
If you paid for the appraisal, you should be able to get it re-assigned to another lender.
are you truly asking them to count unreported income? perhaps it's just me but if you'd report your true income and not be a tax cheat maybe you'd get what you're asking for from the bank. I'd imagine if you try to take them to court as you're implying the Judge would apply the 'Clean Hands Doctrine' and you'd be thrown out very quickly
Quote:
On 2004-07-19 19:01, suekostalas wrote:
are you truly asking them to count unreported income? perhaps it's just me but if you'd report your true income and not be a tax cheat maybe you'd get what you're asking for from the bank. I'd imagine if you try to take them to court as you're implying the Judge would apply the 'Clean Hands Doctrine' and you'd be thrown out very quickly
suekostalas,
i think you are missing the whole point, i told her in the beginning what i make and a lot of that was tips and that i was in a tip compliance. it doesn't take a rocket scientist to figure out that some of that goes unclaimed, and in this town she would be dealing with people in the service industry all the time who would also be in a tip compliance as the majority are.
in case you have no clue of what a tip compliance is and it seems like you don't. a tip compliance is a determined amount of money that the IRS and the hotel come up with based on the bar that you work at. that amount appears on your cheque every pay day and you are taxed on that amount wheather you make that much or not. fortunately i regularly make more than the compliance amount as does every other bartender and waitress in this town, and i can assure you they would never claim more than they had too. and why would you if you don't have too. and i don't think you would either, if you did you may as well get in line to be the next pope.
by the way i have no intention of taking them to court, as it would be a waste of my time, more than likely i will take the advice from above and take my appraisal elsewhere.
thanks.
actually, I know exactly what tip compliance is. when I was manager in the restaurant of a large hotel many years ago we actually had paperwork that we gave to the employees telling them that their actual tips earned were reportable and that they should consult with a tax adviser if they had questions on reporting their tips. a tax cheat is a tax cheat, whether it's done all the time in your area or not and to expect a lender under federal authority to look the other way is just incomprehensible to me
please spare me the mellodrama stuff, next you will be telling me to go to church and confess my sins.
once again you do not understand the tip compliance. when you start with the company you have the choice of declaring your own tips and keeping a log book or participating in the tip compliance where they already have a set rate in mind. i choose the tip compliance because i don't feel like keeping a log book.
maybe you should work for the IRS, i think you would get great pleasure out of doing audits.
thanks for the debate, it has been fun.
Hey,
Go find a better loan broker...there are enough of them out there. I think you got the wrong end of the stick on this deal. Get a copy of the appraisal and maybe the next loan company will accept it. Good luck on that one.
BUT...
You have been cheating on your taxes. Based on the numbers you provided you have understated your income by $12k a year.
Five minutes ago I knew nothing about Tips and Taxes, but we live in the wonderful world of the Internet. Go log on to the IRS website. It is very specific about tips...everything you earn is taxable.
Desertrat,
Another option is that many lenders including WF can use bank statements to determine your income. If your bank statements show the income you stated, then you are in. Otherwise, you need a stated program or NINA (No Income No Asset). You typically must have a middle score above 680 for stated or NINA. If your scores aren't great, you may want to try WF Enora which is in their subprime department. Turnaround is quick, and the rates are competative.
I have a question to add about stated income programs:
Do you need to have a letter from an accountant or attorney in order to qualify for stated programs?
I am currently applying for a stated program, and they requested such a letter stating that I am self employed for the last two years, but I'm not and I told them that I have a job. Is that a requirement? Obviously it is for them, but is it for all stated programs. I don't know any attorneys or accountants. I've always done my own taxes. Didn't mean to jump into the middle of this debate but I thought I'd ask.
Thanks
Scott
Tip compliance is not a way to cheat on income taxes... if your tax returns show $2500, that is what they should go by. Use the appraisal you have already paid for to shop elsewhere, you can probably find finaning. This time I would list income no higher than what I reported. I wouldn't leave a trail for the IRS anyways if I was in your shoes.
You should go either stated income or no income verfication. With a credit score of 620 or higher it won't be a problem. You'll pay a little more in interest or fees, but I would rather pay more in interest than more money to the IRS. Just my $.02
hey you know if your taxes are correct. just remember "the difference between tax avoidance and tax evasion is 20 years."..........