In February 6, 2009 I received a Loan Modification Proposal from IndyMac that I read, signed and approved and sent it back. With it, I sent back a copy of my business Profit and Loss Statement for the year 2008.
In this Profit and Loss Statement I showed a Pre-Tax Net Income of $ 78,713.87 for the year or $6,559.00 per month, after deducting my business expenses. A few days after IndyMac received my Profit and Loss Statement a negotiator from your Institution called me and told me they had to change the terms of the Loan Modification that I signed and submitted, based on the fact that IndyMac considered that I had a $1,500.00 excess disposable income per month, so I had to come up with cash payments of almost $9,000 that I don't happen to have.
Nevertheless and with all due respect, I have to disagree with IndyMac's findings. What I submitted was my business yearly profit. Fortunately, my business operated with a profit but this is far from reality after I deduct my personal expenses.
From my business monthly profit, I have to substract the following expenses.
Present Mortgage Payment to IndyMac $ 2,200.00
Home Owners Association Fees 320.00
Property Taxes 366.00
Property Insurance/Fire & Liability 50.00
TOTAL HOUSING EXPENSE $ 2,936.00
OTHER PERSONAL EXPENSES
Car Payment 500.00
Food and Medicine 400.00
San Diego Gas and Electric 100.00
Health Insurance Payment 300.00
Credit Card Payment 100.00
Other Expenses 200.00
TOTAL PERSONAL EXPENS $ 1,600.00
TOTAL HOUSING EXPENSE $ 2,936.00
TOTAL PERSONAL EXPENSE $ 1,600.00
TOTAL HOUSING/DEBT EXPENSE $ 4,536.00
PERCENTAGE OF HOUSING/EXPENSE RATIO
OF MY NET BUSINESS INCOME 69%
I believe this is a very high percentage due to the fact that Federal and State taxes have not been calculated and that is the reason why I have fallen behind my payments.
With the initial loan modification that you sent me, my mortgage payment was going to be reduced to $1,200 for 5 years, meaning $ 1,000 savings per month. Also, I have started proceedings to lower my property taxes, because the property that I bought for $ 378,000 with $ 70,000 down payment is now only worth $ 190,000.
By bringing down my HOUSING/DEBT RATIO $ 1,000.00 per month, the percentage for my housing/debt ratio compared with my income brings it down to 54%. With the property tax reduction of $ 150.00 less per month, that will bring down this percentage to 52%. I expect that by reducing my personal expenses a little bit more, I can bring down this percentage to 50%.
Considering that I am more than willing to stay in my home that unfortunately has lost almost 50% of its value and also be able to make the new modified payment without having to apply for public assistance, it would be to our mutual benefit if IndyMac reconsiders their decision and allow the above loan modification that has been signed and approved, to stay in place without asking for cash that I don't have.
I appreciate the attention that you can give to this letter since "Time is of the Essence".
Thank you
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