Profit And Loss Statement For
HAMP Modification

I am self employed. I sent a quarterly (4th qtr 2009) Profit & Loss Statement to my mortgage company for a HAMP Modification. Because I subtract what I pay myself in commissions as an expense, my P&L is very low. They told me it wasn't high enough and I need to send a 1st QTR 2010 version.

Should I not subtract the commissions I pay myself to show a higher profit?

If I do, doesn't this make my P&L inaccurate?

What are they looking for??

I need to do this today or tomorrow so please respond ASAP if you get this.

Thank You.

Mortgage Loan Modification Answer:

by Loan Modification Expert - Dan North

It should not make any difference as the commission income will be on your Personal Tax Return and would be taken into consideration as your income.

You would have been asked for a 1st QTR 2010 Profit and Loss Statement anyway and usually you would be asked for year to date.

If all your income is covered in the documentation that you are sending just send how you have been keeping your record keeping.

You have not been turned down for a modification and if you were you would get a written explanation of the denial. You then have the opportunity to supply additional information to change the denial.

Basically what the lender is looking for is to increase your income so that they are not required to lower your payment.

The lower your income the lower the monthly payment has to be in modifying your loan.

There is a point where if your income is too low, foreclosing on your home will save them more money than modifying the loan. That amount depends on a lot of factors such as mortgage amount, the interest rate you are paying now, how many foreclosures there are in your area, what your home could be sold for and how fast could they sell it, how much the lender will lose in a foreclosure sale, etc....

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