Posted on: 03rd Feb, 2011 07:53 pm
My yearly income for CY 2009 and 2008 was high enough that I paid federal taxes on 85% of my SS income which is $26.8K gross. I have 2 other sources of income. In Nov 2010 I applied for the HAMP knowing that my CY 2010 gross income would be reduced by half. Even with a reduction in my CY 2010 gross income I still have to pay taxes on $12.5K of my SS.
CitiMortgage going off my income for CY 2009 is grossing up my TOTAL SS even though I paid taxes on over $22K which is 85% of my gross SS (gross = prior to deductions for medicare, etc). I understand grossing up the non-taxed portion of my SS by 25% which is about $4K, but why the taxable portion? As part of the HAMP application they have copies of my 1040's for '09 and '08, they can see on line 20b the amount of SS that is taxable. Doesn't the HAMP Handbook, Version 3 published in Dec '10, in section 6.1.1 state that SS is considered gross except for the non-taxable portion? I have been fighting this battle with Citi for 3 weeks. Their answer is if I don't like it I don't have to accept the HAMP terms. Since my first Trial Payment was due Feb 1st I paid what I felt was an inflated mortgage payment, inflated by approx. $400.00 per month. Due to the fact that they grossed up my TOTAL SS, my income to mortgage debt ratio is 35% not 31%. Am I wrong or are they wrong. They also told me that this is how the SS calculation is handled at Citi for everyone.
If you tell me that I'm wrong then I will shut up and accept the terms that they have given me. The people who work for the HOPE Help line are of no help. Please advise.
CitiMortgage going off my income for CY 2009 is grossing up my TOTAL SS even though I paid taxes on over $22K which is 85% of my gross SS (gross = prior to deductions for medicare, etc). I understand grossing up the non-taxed portion of my SS by 25% which is about $4K, but why the taxable portion? As part of the HAMP application they have copies of my 1040's for '09 and '08, they can see on line 20b the amount of SS that is taxable. Doesn't the HAMP Handbook, Version 3 published in Dec '10, in section 6.1.1 state that SS is considered gross except for the non-taxable portion? I have been fighting this battle with Citi for 3 weeks. Their answer is if I don't like it I don't have to accept the HAMP terms. Since my first Trial Payment was due Feb 1st I paid what I felt was an inflated mortgage payment, inflated by approx. $400.00 per month. Due to the fact that they grossed up my TOTAL SS, my income to mortgage debt ratio is 35% not 31%. Am I wrong or are they wrong. They also told me that this is how the SS calculation is handled at Citi for everyone.
If you tell me that I'm wrong then I will shut up and accept the terms that they have given me. The people who work for the HOPE Help line are of no help. Please advise.
Hi arney,
The social security income should be exempt from the non - taxable portion. However, it will be better if you could contact a tax adviser and an attorney and take their opinion in this matter.
Thanks
The social security income should be exempt from the non - taxable portion. However, it will be better if you could contact a tax adviser and an attorney and take their opinion in this matter.
Thanks
Although the HAMP guidelines are clear in the manual which you mentioned, certain lenders can still have what is called overlays to the HAMP program. Meaning they can have their own guidelines but still run you through the HAMP program. If you really feel they are taking advantage or are not adjusting your payment to the 31% then you may want to contact a lawyer or Attorney General. It is not on common for Citi to be wrong and to try to do things that are kind of off color. Kudos to you for reading the hampadmin manual. Not many homeowners do and it only empowers you to fight back and keep the lenders on their toes!