Thousands of homeowners apply for a HAMP mortgage modifications every day. With those applications, for thousands of honest and hard-working Americans go their best hopes of keeping their homes. So, shall we say this is just a little bit important?

Yet the vast majority of applicants who review their application with me prior to submittal make errors in the Income Section of the application. That’s right, they get their own income wrong! Since my advice is to not submit an application with even a zip code error, this one really “gets my goat” (you know that’s a racehorse term, right?).

Here’s my advice about the income section of your mortgage modification application:

1. Include the right household income. That is, you must include the income from the parties singed on the loan. Any other household income need only be included at your discretion. So, even if your spouse, partner, significant other or adult children or parents contribute income, you need only include their income if you decide to.

2. Calculate your income correctly. You may laugh at this but MANY people miscalculate their own income! Common errors are using net instead of gross income, confusing bi-weekly with semi-monthly paydays and using last tax year’s income instead of the most recent past 90-days.

Show your calculations right on the pay-proof. That is, show exactly how you extrapolated and calculated. That way, they understand and, hopefully, agree.

3. Document your Income extensively. I say extensively because I recommend you go beyond what is normal or expected. Think of it as an actual loan application and document it like it’s going straight to underwriting. This includes, notarizing self-employed P&L, including annual award letters AND check stubs for SSI and EDD income, Attestation Statements (signed and notarized) on bank statements when used to show deposits to document cash earnings, etc.

Sure, some of these measures are beyond what the bank requires, but the requirements are met by the hundreds of thousand s of others in line ahead of you. Your application has to stand out and be bullet-proof.

4. Augment your income, if you must. If your income is insufficient to qualify for the modification (if your DTI is just too high, then you have to augment your income or give up. To apply when your ratios are off is a waste of time.

Some ways my clients have augmented their incomes in order to qualify include:

• If self-employed…use your best period!!
  
• Rent a room
  
• Rent a garage
  
• 2^nd job
  
• Kids pay rent
  
• Parents pay for care, driving, room, etc.
  
• Contribution Letter from Others
  
  • Notarize it
    
  • Include proof of funds, income
    

5. Reduce your income, if you must. That’s right, some folks fail to qualify because their mortgage payment is too small a percentage of their household income. They actually have to reduce their income!

Some ways my clients have reduced their incomes in order to qualify include:

• Remove income from any household member not on the loan
  
• Scrutinize untraceable income…like tips
  
• Remove “at risk” income…like bonuses based on company performance    
  
• Scrutinize expense items on self-employed P&L
  

Get the Income section of your mortgage Modification right and you have a solid base on which to build a winning application.