What if you are close to poverty line income?

[Catia]

What do they do/what do they look for when you are low income?
Is it harder to explain things? Anyone out there on a fixed income that's pretty low?

So many things are crossing my mind right now, especially after I have reviewed some of the docs pertaining to my mortgage. Actually, I think it may well have been one of those 'predatory loans'--but i never considered this because I was not forced to sign papers etc--Anyway, loan is 3 years old, and was a cash out loan, my house was fully paid off so not a refi. of an existing loan, it was for 80% of the equity in my house. They had me go "stated" (no doc?) because I was a waittress at the time, they said it would be easier and less hassel, due to tipped income. They guided me for what to put down, alot of it was projected and based on what I could potentially make working 'x' hrs per week if tips were really good.
I am worried now cuz they may go through old docs, and the income on the loan application was not near what I made that year. Actually, in all honesty, I never thought would get the loan in the 1st place--I was pretty amazed that it went through, I remember broker telling me it would be a cake walk because my house was free and clear--Do I get into trouble for this stuff??? Again, no one forced me to take the loan, but still somehow, after reading about predatory loans, I think it may be one--I had to pay ridiculous charges to NOT have it be an arm, and also, interest rates were high and I decided to pay down points to have a lower interest rate, but they got really weird when I wanted to pay down more than 1 point (=1%)--and I paid cash for some, but some was rolled into the loan anyway-and them they hit me with a 3 year "no prepay" at closing-which made it really hard to even try to sell-is this a predatory loan?
Do the trustees/courts have any sympathy in these situations--or are they just "well you signed it you should have known" All in all, my closing costs were like 7000+ on a 58,000 loan. But--it all made sense at the time, but I am looking closer, I am afraid of what broker told me to write down...

[ssdsco]

What do they do/what do they look for when you are low income?
Is it harder to explain things? Anyone out there on a fixed income that's pretty low?

So many things are crossing my mind right now, especially after I have reviewed some of the docs pertaining to my mortgage. Actually, I think it may well have been one of those 'predatory loans'--but i never considered this because I was not forced to sign papers etc--Anyway, loan is 3 years old, and was a cash out loan, my house was fully paid off so not a refi. of an existing loan, it was for 80% of the equity in my house. They had me go "stated" (no doc?) because I was a waittress at the time, they said it would be easier and less hassel, due to tipped income. They guided me for what to put down, alot of it was projected and based on what I could potentially make working 'x' hrs per week if tips were really good.
I am worried now cuz they may go through old docs, and the income on the loan application was not near what I made that year. Actually, in all honesty, I never thought would get the loan in the 1st place--I was pretty amazed that it went through, I remember broker telling me it would be a cake walk because my house was free and clear--Do I get into trouble for this stuff??? Again, no one forced me to take the loan, but still somehow, after reading about predatory loans, I think it may be one--I had to pay ridiculous charges to NOT have it be an arm, and also, interest rates were high and I decided to pay down points to have a lower interest rate, but they got really weird when I wanted to pay down more than 1 point (=1%)--and I paid cash for some, but some was rolled into the loan anyway-and them they hit me with a 3 year "no prepay" at closing-which made it really hard to even try to sell-is this a predatory loan?
Do the trustees/courts have any sympathy in these situations--or are they just "well you signed it you should have known" All in all, my closing costs were like 7000+ on a 58,000 loan. But--it all made sense at the time, but I am looking closer, I am afraid of what broker told me to write down...

The closing costs sound very high. What mortgage terms did you get....interest rate....fixed.....length ?

Although it's been three years the biggest question from the trustee might be what you did with the cash out. I don't think he'll care about your mortgage application/terms but I might be missing something.

[Catia]

Mortgage is a fixed rate, 30 yr, I bought down points to about 8%. This was cash, but somehow I think it got rolled into the loan--meaning double pymt--UGH! I really had to fight for it NOT to be an ARM or balloon, they kept pushing for that, and I was ready to pull out of the whole deal, refusing to close if it could not change. They did change it to a fixed rate, last minute--BUT, the day of close is when I found out about the 3 year 'no prepay'. Anyway, no one held a gun to my head, predatory or not-if not for my illness, I'd probably be OK, but income is non-existant right now.
I used much of the $$ for home repairs on the residence the mortgage was on, new flooring, drywall, painting, some plumbing, light fixtures, and some to purchase an investment property, but LESS than 1/2 of the $$ went to the investment prop--But recently, 3 yrs later, due to decline in my old neighborhood, and for personal safety issues, I moved to the investment prop, and this is now my primary residence.
If they go thru my bank statements, i am not really worried about what they will see--cuz most withdrawls were for home improvement stores, thousands of dollars, I am NOT a frivolous spender--not even close-you'd be amazed the small amount of $$ I can live off of-even my trips to the salvation army thrift store are on my bank statements, not one thing that could even be mildly construed as a "luxury item", because I just do not do that kind of stuff--most everything I do own is 2nd hand/recycled.
The whole reason I even decided to get the loan was to avoid having to be slave to the SSI/SSD system due to my illness. I figured investing in property would allow me a passive income and I would not have to go on disability for support, and that would give me the freedom to return to work or school without having to be audited by the govt and asking permission to do so...That was my entire goal with the loan, to be free of the system, and retain my independence.
What tpes of questions do they ask? Do they even listen to your personal circumstances? Does any of this really matter when you are before a trustee or judge?
Fact is, aside from the possible upcoming FC, which WOULD lead to a DEFICIENCY JUDGEMENT of probably around 40k or more--I have very little unsecured debt--very very little--just some old back utilities and some medical bills--probably maybe 5k in unsecured debt. The only reason for BK is to avoid the deficiency judgement because I do not want my current primary residence to get leined for the deficiency judgement, because that would make it upside down.

[butterflywings]

What do they do/what do they look for when you are low income?
Is it harder to explain things? Anyone out there on a fixed income that's pretty low?

So many things are crossing my mind right now, especially after I have reviewed some of the docs pertaining to my mortgage. Actually, I think it may well have been one of those 'predatory loans'--but i never considered this because I was not forced to sign papers etc--Anyway, loan is 3 years old, and was a cash out loan, my house was fully paid off so not a refi. of an existing loan, it was for 80% of the equity in my house. They had me go "stated" (no doc?) because I was a waittress at the time, they said it would be easier and less hassel, due to tipped income. They guided me for what to put down, alot of it was projected and based on what I could potentially make working 'x' hrs per week if tips were really good.
I am worried now cuz they may go through old docs, and the income on the loan application was not near what I made that year. Actually, in all honesty, I never thought would get the loan in the 1st place--I was pretty amazed that it went through, I remember broker telling me it would be a cake walk because my house was free and clear--Do I get into trouble for this stuff??? Again, no one forced me to take the loan, but still somehow, after reading about predatory loans, I think it may be one--I had to pay ridiculous charges to NOT have it be an arm, and also, interest rates were high and I decided to pay down points to have a lower interest rate, but they got really weird when I wanted to pay down more than 1 point (=1%)--and I paid cash for some, but some was rolled into the loan anyway-and them they hit me with a 3 year "no prepay" at closing-which made it really hard to even try to sell-is this a predatory loan?
Do the trustees/courts have any sympathy in these situations--or are they just "well you signed it you should have known" All in all, my closing costs were like 7000+ on a 58,000 loan. But--it all made sense at the time, but I am looking closer, I am afraid of what broker told me to write down...

Oh my gosh, I would be very very worried if I were you about filing BK7 if you misstated your income to get that loan. The judge would see this that you signed on the dotted line on the loan and you knew the income amount that was on it was not true.

It would be nothing at all for the bank to pull your loan app, especially if they see you file BK on the money you owe them. They could fight your BK, and if they can prove that the loan was based on inflated/untrue income they will claim fraud and the loan could very well not be dischargeable.

Please consult with a good lawyer.

[Lindsay]

About 4 years ago, we refinanced our home through our existing mortgage company. They wanted to do a "no doc" stated income loan too. They didn't even ask our income, but wanted to see 2 years of bank statements so they could see our "cash flow." It was very odd. We do plan on keeping our house after the BK so that won't be an issue, but it seems like alot of people may have been pushed into loans that they couldn't afford by over-zealous mortgage companies. I didn't want to refinance our mortgage. They contacted us by phone everyday and were badgering us. We kept telling them no and they were extremely insistant. It was a really bizarre experience. We didn't get a big sum out in equity, about $28,000, so it wasn't a real good business move for us. Also, this loan paid off the first mortgage (which was with the same company) and some of our credit card debts at the time. It wasn't enough to pull us out of financial trouble. The only good thing is that we no longer have any equity in our home so losing it in BK won't be an issue.

I would definitely talk to a lawyer, but right now, there is so much heat on the subprime lenders that they may not want any trouble.

[Catia]

Yes, it was a local broker, the loan was "stated" or "no doc"--no they just wanted some bank statements, and they filled in the blanks.
Thing is, I only asked for about 1/2 of the loan amount. Apparently this is where the problem started...I was told it was very hard to get a loan for under 50,000. But that loans for over $50k were much easier. This made no sense to me, but I was told the smae thing by several brokers.
I realize now, this IS a predatory loan. No matter now though, cuz I signed it 3 years ago. Loan was sold 4 times in 1st year, making everything a hassel, servicers-- they'd lose documents--then they'd threaten me, they tried to force me to pay for things like HO ins thru them when my policy was pain in full via escrow-they did not pay my taxes from my escrow and tried to charge me late fees-they have actually come to my house-several times-And this was LONG BEFORE I was ever late on a pymt!!! I have a 15 day grace period, and will receive 2-6 calls PER DAY from the 1st of the month til the 15th of the month if my check has not fully cleared on the 1st day of the month--they say they have no way to control this--I say BS!!!. Drives me nuts. Current loan servicer is Specialized Loan Servicing, I have threatened to have them reported for harassment many times. I have had to remind them that they purchased my signed contract--not vice versa, and that they must abide to my contract terms. They have shown up at my door when I have been paid and check has cleared--then they charge me for it on my next statement?!?!?! It is embarassing to have such a thing happen.

Back to original question--what types of questions do the trustees ask about 3 year old loans??? There's no fraud, I paid religiously til recently. If it's "no doc" does that make it worse??Anyone???