Wells Fargo Loan Modification Approval Formula Explained

Posted by admin On April - 30 - 2013

The Wells Fargo loan modification approval formula uses the borrowers gross monthly income, the current mortgage payment and loan balance and something called the Waterfall Method.  Here are some details that will explain how this approval formula works and why it is critical that your loan mod application shows just the right amount of monthly income, expenses and assets.

WELLS FARGO LOAN MODIFICATION APPROVAL FORMULA EXPLANATION

  1. It’s all about the MATH-no matter how deserving you are,unless your financial worksheet figures are acceptable and pass the formula, you will NOT be approved for a new lower mortgage payment!  Don’t think that the bank is on your side and wants to help you-they will only help you if you prove to them in black and white that your financial situation fits into the strict guidelines for acceptance.
  2. Most Important! The household monthly gross income is a critical part of this formula-the amount of total gross monthly household income you report will be used to determine your debt ratio, your new target modified payment

    Approval Formula Computed Automatically

    and also if you pass the Waterfall.  If you report too much or too little income, you will fail.  Homeowners can use the Loan Mod Calculator to automatically compute and display exactly HOW MUCH income will be required to PASS.

  3. The debt ratio calculation uses your total gross monthly income and your current mortgage expenses-monthly mortgage payment, monthly property taxes, monthly homeowners insurance and any HOA dues.  The standard approval formula requires that more than 31% of your income be used for household expenses.  However, a new plan called Tier 2 is a bit more flexible on the debt ratio formula and allows a range between 25% and 42%.  The Loan Mod Calculator will compute your debt ratio and show you a PASS or FAIL for this category instantly.
  4. Cash flow is part of the Wells Fargo approval formula and tells the bank if you are truly in a financial hardship.  Ideally, after paying all of your monthly bills you should be barely making it or even in a negative cash flow-BUT after the loan mod you need to show that you will have at least $250 left over each month.  Use the Loan Mod Calculator to fine tune your expenses so that your results show you a PASS for these two important categories.
  5. What is the WATERFALL?  This is the test that you must PASS-it shows Wells Fargo that your mortgage can be modified using standard terms to arrive at your new modified, affordable mortgage payment.  Your Loan Mod Calculator results will show a Pass or Fail for the 30 year, 2% mod, or for a 40 year mod or for principal reduction.  You may need to adjust your budget figures until the Calculator shows you a PASS for one of the Waterfall categories.

The secret to the Wells Fargo loan modification approval formula is knowing ahead of time how to adjust your budget figures so that you PASS and that you be able to submit an acceptable financial worksheet with your loan mod application.  Visit MyLoanModificationCenter.com for more tips and information.

Bank of America RMA Form-Avoid These Mistakes That Mean Denial

Posted by admin On February - 12 - 2013

How can you avoid common mistakes when preparing the Bank of America RMA form for loan modification?  Unfortunately the majority of homeowners who apply are turned down-and this is almost always due to the information that they provided on the application form-especially the financial worksheet page.  Unless you know ahead of time exactly how much monthly income, expenses and assets to report, chances are you will make a mistake that will mean denial.  Here is some important information to help you prepare your RMA correctly.

BANK OF AMERICA RMA FORM TIPS

  1. Don’t assume that simply because you are in financial hardship or because your mortgage is underwater that you will qualify!  The approval process is really more about MATH than your particular hardship-unless you understand the approval formula that the bank uses, you may complete the RMA incorrectly and be denied.
  2. The approval formula used on all applicants utilizes your monthly gross household income, your current mortgage balance and payment and the Waterfall Modification Method.  Your monthly income must be sufficient to pass these

    Required Income Computed

    guidelines, but it also cannot be TOO high or you will fail as well.  Find out how much income you need to pass-use the Loan Mod Calculator.  This program will automatically compute and display your specific income required based on your mortgage terms.

  3. You are allowed to use non-borrower contributions for monthly income, as long as they live in the property.  You may also use rental income, but only 75% of the net income is counted in the approval formula.  Roommate income can be used as long as you can document receipt-bank statements, canceled checks, etc.
  4. Social Security and pension income are counted, but Bank of America will “gross up” the amounts by 25% when they use the approval formula.  This allows for non-taxable gross income to be qualified.  The Loan Mod Calculator will help you figure this out, and compute it automatically for you.
  5. Monthly household expenses must be reported on the Bank of America RMA form-and you must show them that you cannot make ends meet with the current mortgage payment, BUT if given a loan mod you will be able to pay your bills and have at least $250 left over each month for emergencies.  The Loan Mod Calculator will show you where and how you need to adjust your expense to pass this important approval guideline.

Get more free information and helpful tips to apply and qualify for a Bank of America loan modification, visit MyLoanModificationCenter.com , BLOGS.

Not sure how to complete the financial worksheet portion of the loan modification application RMA form?  This is the part that confuses and causes problems for most homeowners who need to apply for a loan workout.  Since this is such a big part of the approval criteria, it is important to know ahead of time just how you need to report your household monthly income, expenses and assets-if you make a mistake here then you will be denied the help you need.

What you need is a sample budget that shows you just how to complete the financial worksheet page of the RMA.  The amount of monthly gross income required is determined by your current mortgage balance and payment, and also something called the Waterfall formula.  This is how your bank decides if you fit into their strict loan modification approval guidelines.  If you report too much or too little income, you will fail the Waterfall.  You can your own sample budget that will compute your specific income requirement and use this to help you complete the financial worksheet.

The Loan Mod Calculator is a tool designed just for homeowners to use-it will automatically compute and display your very own sample budget showing your:

Sample Budget Computed

  1. Income : required amount
  2. Expenses: how and what to list
  3. Assets:  how much is acceptable
  4. Waterfall:  Pass or Fail and the new modified loan terms you qualify for-including any principal reduction
  5. Debt Ratio: you must pass this trigger
  6. Cash Flow:  pre-mod and post-mod must meet the guidelines

You can use the Loan Mod Calculator sample budget to show you how and where to fine tune your own monthly budget figures-when the Calculator shows a PASS for all categories then you can complete your RMA financial worksheet using these fine tuned figures.  Knowing ahead of time how to prepare your application correctly will make a big difference in whether you get approved or not.

Loan Modification Qualification Requirements Explained

Posted by admin On February - 4 - 2013

The difference between getting approved for a loan modification and getting denied means understanding what the qualification requirements really are.  Many times a deserving homeowner will be turned down simply because they did not understand how to complete the application correctly-especially the financial worksheet page.  This is part of the application where you are asked to detail your monthly budget figures.  Your income, expenses and assets are the biggest part of the qualification requirements-so make certain you understand how to report your budget correctly.

What are the loan modification qualification requirements? Here is a brief explanation of what your bank is looking for:

  1. Financial hardship:  loss or reduction of income, increased expenses, high monthly debts and lack of reserves (savings) are the common acceptable reasons.  Keep in mind that loss of home value alone is NOT a good reason for a loan mod.  Death, divorce, illness, military service, employment or self employed income reduction are all valid reasons.  You will need to write a brief explanation letter-a good TIP is to start each paragraph with one of the above reasons:  “My income has been reduced because…” and “My monthly bills are high because we used our credit cards to live…” for example.
  2. Acceptable Gross Monthly Income:  the bank needs to know what your household gross monthly income is in order to determine your debt ratio and to find out if

    See Budget Figures

    your loan can be modified using the WATERFALL.  This is a standard formula to arrive at the new modified target payment and the terms that will be required to achieve that new payment.  CAREFUL-if you report too much or too little monthly income you will not pass the qualification requirements.  Find out ahead of time just how much income to report-you can use the Loan Mod Calculator-a program that mimics the qualification requirements and shows you what it takes for you to pass the requirements.

  3. Monthly Household Expenses Pass requirements:  you will be asked to itemize your bills-items like groceries, gasoline, utilities, car payments, insurance, day care, etc will be reviewed to determine qualification.  Your expenses must show that you cannot make ends meet now, but that after given a loan modification you will be able to pay everything and have at least $250 left over each month.  You may need to fine tune some items, either lower or increase some of your expenses to achieve this goal.  Use the Loan Mod Calculator to help you-it will show your cash flow both pre mod and post mod and allow you to make your adjustments before submitting.
  4. Assets:  Don’t report too much money on  hand or you will not pass the loan modification requirements.  Some homeowners mistakenly believe that the more money they have in the bank the better they looks for approval.  Verify if your assets pass, use the Loan Mod Calculator to confirm.

Give your application the best chance of passing the loan modification qualification requirements-work on your budget figures and hardship letter ahead of time to be sure that you are applying correctly.  Get more free tips and information at MyLoanModificationCenter.com.

When you apply for a Wells Fargo loan modification, you will be asked to fill out the RMA form and financial worksheet.  Careful, because the information you provide to the bank on this form will determine if you qualify for a loan workout or not.  It is critical to understand exactly what the bank is looking for so that you can complete your form correctly and pass the approval guidelines.  Here are some important things to be aware of:

The RMA form is 7 pages long and asks for your personal information – name, date of birth, social security number, employment, etc.   There is also a couple of affidavit areas that you must sign, and sections to detail any other properties you own.  You can now apply for a loan modification on investment properties, so this form provides a special area for that type of loan workout.  Be sure that you check every box that is applicable, and complete the form legibly.  Some areas may not apply to your situation so mark those with an “N/A”.

The financial worksheet page of the Wells Fargo RMA form asks that you provide your household monthly budget-including the monthly income, monthly expenses and your assets.  The bank uses these figures in a standard approval formula to determine if you fit into the loan mod guidelines.  The budget information you provide must prove that you PASS the criteria for approval-so you need to know exactly how much gross monthly income you need to report, how to list your monthly expenses and how to show your assets.  This is tricky for many homeowners-but if you know this information ahead of time you will have the opportunity to fine tune your figures before you submit for review.

See Budget Requirements

The Wells Fargo RMA form and financial worksheet is carefully reviewed by the bank-only those who can prove in black and white that their current financial situation fits into the approval guidelines will be accepted.  Since this is so important, you may need help figuring out how to complete your form correctly.  If you need to learn how much income you need to qualify, you may want to use a program that computes this form you-the Loan Mod Calculator will automatically display your specific budget requirements.  Also, be sure that you double check your monthly expenses and cash flow on the Loan Mod Calculator-you may need to increase or decrease what you report in order to pass the approval criteria.  Verify that you PASS all of the approval guidelines-debt ratio, cash flow, target payment and Waterfall-before you submit your RMA.  For more helpful tips and information, visit MyLoanModificationCenter.com.

Getting approved for a Wells Fargo loan modification requires passing the very picky financial requirements the bank has in place.  These approval criteria include the homeowner report the acceptable amount of monthly household income, monthly household expenses and that their cash flow pass.  This part of the loan mod process usually stumps homeowners, because if you don’t know what to report on your financial worksheet, then you will most likely get it wrong and get denied.  This happens to over 75% of all applicants, but is there something that you can do to get it right?

The Wells Fargo loan modification application includes the financial worksheet-this is where you must itemize your monthly budget figures.  This part of the RMA form is carefully reviewed by the bank and if your income and expenses pass the strict guidelines, you will get the go-ahead.  Since the bank uses the same approval formula on every homeowner, it is possible to learn ahead of time HOW you need to report your budget.  Taking the time to learn and use the Loan Mod Calculator will really help you to fine tune your figures correctly.

The requirements that stump most homeowners and cause most loan mod denials is the gross monthly income figure.  This is so important because that is used to determine several approval requirements-your debt ratio, your new target

See Budget Requirements

payment and whether your loan can be modified using the Waterfall method.  It’s simple-if you report too much or too little monthly income you will FAIL the picky approval criteria.  You need to know exactly how much monthly income will be required so that you can make the adjustments before you submit-the Loan mod Calculator will automatically compute this for you.

Be sure that you also fine tune your monthly expenses so that your pre-mod cash flow is either a negative figure or barely breaking even, and ALSO so that your POST MOD cash flow will be a positive figure of at least $250 per month.  The Loan Mod Calculator will compute and display these figures for you-make your adjustments so that you get a PASS when Wells Fargo reviews your financial worksheet.  You can get free tips and information at MyLoanModificationCenter.com.

What do homeowners ask most often about applying for a Wells Fargo loan modification?  Hands down, it is “How do I know what to put on my Financial Worksheet to qualify?”  That page on the official RMA application form stumps the vast majority of borrowers who want to ask the bank for help with a lower mortgage payment.  It’s a good question-if you don’t report your monthly income, expenses and assets correctly on this page of the form, you will be automatically denied help.  Here is some helpful information to answer this common question-read this before you submit your application!

WELLS FARGO LOAN MOD QUESTION & ANSWER

How much income do you need to report?  Your gross monthly income will be reviewed and used in a standard formula to determine your current debt ratio, your new target modified payment and whether you pass the Waterfall method.  Since the bank uses a standard formula on every homeowner. you can actually figure out ahead of time how much gross monthly income you need to show on your RMA in order to pass the guidelines.  Knowing this number ahead of time will allow you to make any needed adjustments-like add more income or adjust your income down.  Too much or too little will cause denial.  You may need help to figure this out-you can use a program designed to compute your specific income requirements-the Loan Mod Calculator.

Income,Expenses Computed

How do you list your monthly household expenses?  You must itemize your monthly expenses-groceries, utilities, child care, insurance, etc.  However this is a bit trickier than it sounds because you must show a current hardship-that you are barely making ends meet now-BUT also show that after the Wells Fargo loan modification, you will have at least $200 left over each month after paying all your expenses.  This means you need to know what your new target payment will be ahead of time-the Loan Mod Calculator will display this for you and show your post mod cash flow so you can fine tune your expenses ahead of time.

If you can figure out how to complete the financial worksheet correctly and report your monthly income and expenses so that you PASS the Wells Fargo approval guidelines, you will have an excellent shot at getting approved.  Make sure that you take the time to work on this ahead of time-use the Loan Mod Calculator and complete your application correctly the first time.  For more helpful tips and information, visit MyLoanModificationCenter.com.

Homeowners who apply for a Chase loan modification will need to complete the financial worksheet.  The bank will review this form carefully, and determine if your budget figures pass the standard approval guidelines.  This is where it gets tricky, how do you know exactly how much income you need to report to pass?  Will your monthly expenses be acceptable-what items should you list on this form?  No matter how deserving you are, you won’t be approved unless you know the answers to these important questions.

CHASE LOAN MODIFICATION FINANCIAL WORKSHEET ANSWERS

  1. Gross Monthly Income Requirement:  You must report your household income-this can include salary, self employment income, non borrower contributions (as long as they live in the home), rental income, roommate income, social security, etc.  The total amount reported must pass the debt ratio requirement and also pass the Waterfall Method.  IF you report too much or too little you will be denied.  The gross monthly income you need to report can be learned ahead of time-allowing you to make the needed adjustments before you submit for review.
  2. Monthly Household Expenses:  How you list your monthly bills is important.  Chase will review this information to see if you are in a tight financial situation or if you can actually afford your mortgage.  The goal is to show that you are barely making it now, but if given the loan mod, you will have at least $200 in disposable income after paying all of your bills each month.
  3. Assets:  Be careful here, some borrowers think that the more money they have in reserves the better they look to the bank.  You are only allowed to have a certain amount in liquid accounts-checking, savings, etc.  You can find out beforehand how much is allowed.

    Approval Formula Displayed

Knowing how to complete the Chase loan modification financial worksheet correctly is critical-if you need help figuring out how to fine tune your income, expenses and assets to qualify for help, you may want to use the Loan Mod Calculator.  This program will automatically compute and display your budget figures and show a PASS or FAIL for the approval categories, you can then make the needed adjustments ahead of time to PASS all the guidelines.  Get more tips and helpful information at MyLoanModificationCenter.com

Wells Fargo Loan Modification-Step One Gets You Started Right

Posted by admin On January - 17 - 2013

Knowing the first step in the Wells Fargo loan modification process will get you started in the right direction-and greatly improve your chances of getting approved for a loan workout.  Most borrowers who really need and deserve a loan mod will be denied-that’s simply because the entire application process is so complicated and confusing.  Keep in mind that the bank is not your friend, and they will ONLY help you keep your home if you prove to them that you meet the strict approval guidelines.

So, the first step towards getting approved for a Wells Fargo loan modification is understanding the monthly budget financial worksheet.  This is where you break down your household’s monthly income, monthly expenses and show your assets.  It is important to get this part right-this is the information that the bank uses to decide if you qualify or you don’t.

STEP ONE TOWARDS A WELLS FARGO LOAN MODIFICATION:

  1. Find out ahead of time how much monthly gross income you need to report on your RMA application form.  Careful, if you list too much or too little you will be instantly denied!  You may need to get a roommate to increase income, or show proof of a non borrower contributing some money each month
  2. Learn how to list your monthly household expenses correctly-what to show and what you don’t is important.  Wells Fargo will review this to make sure your monthly cash flow meets the requirements
  3. How much can you have in assets?  There is a strict guideline that you need to know.

SO, the step one in loan modification is to LEARN just what you need to report on your application to qualify-otherwise you will more than likely make a mistake and not get the help you need.  You can get some help with figuring out exactly how to complete the financial worksheet, use a program that automatically computes and displays your own specific budget requirements.  The Loan Mod Calculator mimics the bank’s formula and will help you to know ahead of

Computes your Budget Figures

time exactly how to report your income, expenses and assets.  Go to MyLoanModificationCenter.com for lots more help and information.

Wachovia Loan Modification Complaints-What Are Your Rights?

Posted by admin On November - 1 - 2012

Wachovia Lawsuit

Homeowners who need a Wachovia loan modification have filed so many complaints that the lender had to settle a lawsuit.  Their infamous Pick-a-Payment loan has caused so much financial hardship for borrowers, that the lawsuit settlement provided some rights for affected homeowners.  Unfortunately, there are some misconceptions about just what Wachovia is required to do and what the settlement actually requires them to do.

Most of the Wachovia loan modification complaints stem from the lender’s denial of the vast majority of homeowners who apply.  The good news is that the Wachovia lawsuit settlement mandates that all borrowers be allowed to apply AGAIN-kind of a second chance to get it right and get approved.  This does NOT mean that you will automatically be qualified-you still need to submit your application and prove that your financial situation passes the approval guidelines.

So what is Wachovia looking to see on your loan modification application the second time around?  It’s all about your Financial Worksheet-that page of the application where you breakdown your monthly income, monthly expenses and your assets.  Regardless of how dire your situation may be, unless you submit the acceptable budget figures you will be turned down again.

So, your right to re-apply leaves the ball back in your court-this time will you be able to fine tune your budget figures and report the acceptable amount of monthly income, monthly household expenses and assets to get past the underwriter and get approved?

Keep in mind that Wachovia uses a standard formula for every homeowner that determines if their

Your Budget-APPROVED!

loan can be modified using the standard WATERFALL METHOD.  This can be confusing for homeowners to figure out, so it is critical to do our research, spend some time on your financial worksheet and make those adjustment to your figures before you re-submit for review.

Make sure your financial worksheet figures will pass the Wachovia approval guidelines-use the #1 selling program for homeowners. The Complete Loan  Modification Guide kit and Loan Mod Calculator was developed specifically to help you complete your financial worksheet correctly.  The Calculator will automatically compute and display your own specific budget figures-showing you how and what to report on your RMA application.  Visit MyLoanModificationCenter.com today.