Seems to Qualify but Application has Discrepancies -- Reject?

Question

OK, for some of you long-term landlords this is probably an easy one.

I looked at the applicants' pay-stubs and SSI letter, and pro forma, with two jobs, overtime, and SSI, they do make 3x the rent.

My main question is, the numbers I calculate and the numbers they put on the application do not agree. Which by itself wouldn't worry me greatly as the overtime obviously varies from month to month. But in stating the SSI income the application, they put roughly $1000 more than what the SSI letter said. That number at least ought to agree as there is no variability.

Didn't they even read the letter when they provided it with the application?

So do I chalk this up to simple mistakes or assume they are attempting to misrepresent themselves?

And more to the point, as I'm leaning towards rejection anyway, what do I put on the rejection letter? I don't see online any examples where the application was rejected because the stated numbers didn't match the proof provided.

Alvin Sylvain · Answer

Thanks for your reply. As it so happens, we just went ahead and rejected them. If this one thing was the only discrepancy, we might have looked for an explanation, but it wasn't. Next time we get somebody relying on overtime to qualify, I think that idea of asking for a couple of years' worth of W2 forms is a good idea.

Mark Jones · Answer

Did you ask them why the stated more income on their application for ssi than they provided?  Maybe they have another ssi type income that they forgot to give you proof of.  I agree about using overtime.  Since that income varies, it may not be around the entire year and if you are using that as income to pay the rent, they may not have it.  If they have been on their job for a long time and have history of the over time which you should be able to see on a W2 then I would feel more comfortable using it.

Alvin Sylvain · Answer

I agree 100% but at the same time, this is the environment we live in. I do try to be as fair as possible, even beyond govt standards (really, I don't care if your hair is purple ... but no green), but no matter what you do, you have to say "no" to somebody, and some of those somebody's know they have access to free legal services in a monstrously tenant-friendly state and even more tenant-friendly city.

So I just keep skating along trying as best I can to avoid the thinner patches of ice!

Cheers!

Richard F. · Answer

Aloha,

I would only calculate based on the actual numbers on the SSI letter, and paystub gross YTD pay. If that meets your 3x rent criteria, I would not rule them out on that alone. Credit history and court records will show if they are habitually making bad decisions. People are often reckless when completing apps. It is common to see them write in net figures vs. gross, or just a close estimate. (The worst are those that sell online and try to show their total sales as "income", without accounting for the cost of those sale items.) I would also ask for proof of any other financial resources...IRA, savings, etc. Having NONE is not a great sign...

Now if there are other misleading statements or discrepancies on the app, such as addresses that do not match credit report or paystubs, job history, or other relevant bits, I would be more apprehensive and possibly ask for explanation. Or simply decline.

Bruce Woodruff · Answer

I'd assume they're fudging. You don't need a letter, if they ask say you rented to  someone else....

Bruce Woodruff · Answer

You can get around it easily. It's not the Govt's business who you rent your property to. I spent years in Cali as a Landlord.

Alvin Sylvain · Answer

Thanks for the reply!

I think in California you are required to give a Legal Reason, to make sure you aren't discriminating against purple haired people and such.Not that I'd ever do that ... I just want to see the color of the money!And I doubt it's lawsuit-safe to say it's rented to someone else until such time as it's actually rented to someone else.

Alvin Sylvain · Answer

Aloha backatcha!

This is pretty much how they almost would qualify, using actual paystubs and SSI letter. My concern is not only that the numbers don't match up, but also that they don't qualify without the overtime. I'm concerned that the overtime is variable, different on two different paystubs. So what happens if business is slow for a bit an there's no overtime?

Otherwise, I think you have a lot of valuable insight in your posting. We'll see how this plays out.

Thanks!

Seems to Qualify but Application has Discrepancies -- Reject?

Most Popular Reply