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| | | Forum Newbie
Group: Forum Members
Last Login: 5/24/2007 12:37:46 PM
Posts: 2, Visits: 3 |
| | is anyone else running into the problem where the rental income is not effecting the DTI? We have played around with the rental income to confirm that the net rental income is not effecting the DTI. |
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Supreme Being
Group: Moderators
Last Login: 12/21/2008 11:16:31 PM
Posts: 837, Visits: 1,901 |
| What loan are you doing? If you are doing a refi or purchase of investment property, did you enter the gross rent and occupancy rate in the Investment button on the borrower informatioon screen? This should get the DTI to be accurate.
Bryan
Point Product Manager |
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Supreme Being
Group: Forum Members
Last Login: 9/12/2008 11:24:50 AM
Posts: 289, Visits: 242 |
| | I have had clients who have had this behavior. I've never quite figured out why. Most of the time it calculated correctly but sometimes it will simply leave the net rental income off the 1003 and out of the debt ratio. In most cases, this is on a primary residence for someone who owns multiple rentals. I have also seen several cases where people thought it wasn't calculating correctly when it was. If the total net rental income is negative, this number will show up on the 1008 rather than on the 1003 in the income section. (It shows under All Other Monthly Payments, further confusing the issue.) This is the correct method of calculating it. If the subject property is a rental, make sure you enter the information in the investment button at the bottom of the screen in the borrower information screen. Also, on the REO schedule, there is an occupancy rate. If you don't enter anything in this box, you'll get zeros or negatives. Usually, this is 75% but check with your lender because some lenders have different criteria. Another mistake I see commonly is setting up the REO schedule correctly but not checking the liabilities closely. If there is a liability on the property and it isn't marked as a mortgage or the payment isn't bracketed, it's being counted twice in the debt ratio. A related mistake is leaving a mortgage marked "mortgage" and bracketed when it is on a secondary residence. Point automatically brackets mortgages (removing them from the debt ratio). If you don't account for them elsewhere, this will result in a incorrect calculation. I recommend marking them as an "L" in the R/L(i)/M box and a mortgage in the drop-down. If the payment is bracketed, just go into that field and type in the payment again (removing the parentheses). It's never a pleasant experience to find out your 29/38 ratios are actually 43/55 after submission to the underwriter.
- Mike
mike@mtig.biz |
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Supreme Being
Group: Forum Members
Last Login: 9/12/2008 11:24:50 AM
Posts: 289, Visits: 242 |
| | I just had another member (Chris S) point out that an alternative to unbracketing the mortgage debt on a second home is to enter negative net rental income in the REO schedule. The upside to doing it that way is that you're reminded that you should add PITI into the debt ratio. I actually like this method better than the one I just suggested above. Chris also suggests entering "SECOND HOME-CARRY FULL PMT" in the comment section of the REO. He also reminds everyone to go to the FNMA addendum (Interfaces >> Fannie Mae >> Addendum) and correlate the liabilities to the properties. Again, I couldn't agree more. I felt that these suggestions were worth the reading for other Point users. Thanks for your suggestion Chris!
- Mike
mike@mtig.biz |
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| | | Junior Member
Group: Forum Members
Last Login: 9/6/2007 10:40:25 AM
Posts: 10, Visits: 27 |
| | I found that POINT likes to see on refinance of investment properties, the subject property in the 1st position in th REO section. It seems that the position of either the primary residence or the subject property, in the 1st position on that screen or not and the type of loan (refi or purchase of the same) has a strong bearing on the carry-forward of data from the loan application to the Transmittal Summary. I don't do enough of them to remember, but do recall that when there is an error, it is usually because of this issue of positioning in the REO screen. |
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Supreme Being
Group: Moderators
Last Login: 12/21/2008 11:16:31 PM
Posts: 837, Visits: 1,901 |
| Point 5.4 and below must have the subject property in the first position in refi loans. Version 6.0 lets you have the subject property in any position in the REO section.
Bryan
Point Product Manager |
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