Weird Denial on Discover CLI request

[LuvsRetro]

So, I tried the Discover CLI button on January 15, instant Denial.  

Got letter today states:  Ratio of Monthly Payments to Income (Debt Burden)?!?!?

January 4th report is the date used.

Score is 823 TU.

52k Income

1200.00 mortgage plus Discover's payment...nothing else owed.

160.00 Discover balance reporting, thanks to Discover for not posting for three days.

That just seems weird that they used that as a reason, I do not see it.  Anyone have any input, feel free to post!  Thankyou!.

[Anonymous]

a mortgage of 1200 equates to 14400 a year

14400/52k = approximately a 28 percent DTI.  Thats not that low.  In fact its pretty high.  Add any sort of other payments to that (such as credit card debt), and their reasoning is valid.

Id even take that a step further and reckon they figure 52k as your gross, and have a calculation in place that looks at average taxes blah blah blah.  So on their end your DTI may be a lot higher than raw numbers shows.

Remember anything over 35 percent DTI is red flag territory, and if they have any backend calculations that adjust raw data, you are very very close to that mark just on mortgage alone.

Spending a quarter of your gross income on just your housing payment is really high as it is.  That stood out to me immediately.  My income is about the same and I pay less than 1000 a month, its still a huge chunk to pay.

[LuvsRetro]

Hmm, they didnt seem to mind when they approved me!  However, I can see that.  

Amex didn't mind when they gave me 12K a few days before.

[LuvsRetro]

Oh, one other note, DH pays the mortgage and he makes way more than me!!

[DeeBee78]

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@LuvsRetro wrote:

Oh, one other note, DH pays the mortgage and he makes way more than me!!

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Are you including the mortgage payment in your CLI request? My partner pays our mortgage, and it’s in his name only, so I put $0 on apps and CLI requests. 

[LuvsRetro]

I did enter the mortgage payment... I will not include it next time around.  Thank you.

[Anonymous]

Regulation Z under the CARD Act (2009) was amended to allow adults to claim any income to which they have "reasonable expectation of access" on applications for credit.  So if you're going to include your mortgage payment when asked for housing expense, you should also add your spouse's income to the total income line.  This is a no-brainer for me particularly since I live in a community property state and a lender can initate action against my spouse if I default so I always use our combined incomes when asked.

[CreditCuriosity]

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@Anonymous wrote:

Regulation Z under the CARD Act (2009) was amended to allow adults to claim any income to which they have "reasonable expectation of access" on applications for credit.  So if you're going to include your mortgage payment when asked for housing expense, you should also add your spouse's income to the total income line.  This is a no-brainer for me particularly since I live in a community property state and a lender can initate action against my spouse if I default so I always use our combined incomes when asked.

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Better make sure you file together or this could get you in trouble with certain lenders such as Amex. Also depending on the lender whether it asks for YOUR income or more generic terms of household income as some are very specific while others aren't.  I overall agree if you are a couple and share income by one method or another file together if you want to say put your parents income while you are in college then I completly disagree.

[Anonymous]

I just checked the specific language Discover uses for CLI applications and it reads:

Types of income to include

Examples include current or reasonably expected salary, wages, bonus pay, tips, commissions, internships, living expenses, scholarships or grants, and income from investments.

If you are 21 or over, you may include another person's income that is available to you, such as a spouse or domestic partner.

So obviously Discover allows you to include the income of another person.  I've asked for specific guidance from Amex on this issue in the past and they weren't specific; they only said if I had reasonable access to my spouse's income I could include it on applications.  And since I live in a community property state and have always filed taxes jointly I've had no problems using our combined incomes. And since TILA doesn't allow those under 21 to use another person's income I wasn't addressing that in my original comment. 

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@CreditCuriousity wrote:

Better make sure you file together or this could get you in trouble with certain lenders such as Amex. Also depending on the lender whether it asks for YOUR income or more generic terms of household income as some are very specific while others aren't.  I overall agree if you are a couple and share income by one method or another file together if you want to say put your parents income while you are in college then I completly disagree.

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[LuvsRetro]

Thank you...after mulling this over I had planned to look that info up after work!  Figured there must be a work around.