Consumer complaint received 2024-09-02
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — Application denials
Company: DISCOVER BANK (NV)

I am XXXX XXXX XXXX and receive Social Security XXXX Benefits, which means that I am getting the same amount that I would receive at full retirement age, i.e., without having to be XXXX XXXX XXXX that is. Otherwise, if I had to take retirement at XXXX, there would of course be a significant discount in benefits. When I applied to Discover Home Loans for a {$35000.00} loan back around XXXX of XXXX I was immediately " pre-qualified '' for a XXXX loan based on a XXXX best XXXX score and an income of {$2600.00} net Social Security income, i.e. XXXX after deductions for XXXX XXXX XXXX, etc. Based on the so-called gross-up formula, I stated an income of approximately {$3500.00} per month, i.e., since they tell you to add 25 % to the gross income if the income comes from a non-taxable source. 

I submitted all required documents, except for XXXX year 's tax returns that Discover was requesting because I do not normally file taxes and have not owed anything to the IRS since XXXX when I actually went on XXXX. 

Discover responded that they can not count my full income from Social Security based on my XXXX current income, and the fact that there has been XXXX XXXX since XXXX, and that based on my XXXX income I come up short about {$40.00} per month, with respect to qualifying. At that point, they stated that they were closing my file, and that they were not interested in seeing a XXXX tax return, even if I could file a " XXXX  '' return, just to prove that I am not paying income taxes on my Social Security. 

It is as if they want to see some other form of income, like some gig income that just simply does NOT exist right now. Then it got more complicated : I had a tax lien filed against my property in XXXX for unpaid sewer tax, and I was planning on taking care of that out of the loan proceeds. So now I am worried that I am not going to be able to get a loan from ANY lender. 

This was supposed to be a " pre-qualified '' loan that was instantly " approved '' based on no other income other than Social Security XXXX, and it fell apart. At least in the meantime I am still able to eat and pay bills, by using payday loans and selling things on XXXX. But I can not hold out much longer. XXXXXXXX XXXX XXXX XXXX XXXX XXXX  my mother fell and XXXX XXXX XXXX and had to go to a XXXXXXXX XXXX, and as it turns out - her house in California is paid for free and clear, and worth close to a XXXX dollars. Furthermore, since both of my brothers and XXXX of my nephews are dead, I am going to be the eventual hair to an estate that is otherwise debt free, and so on. Of course the way that California 's property taxes work - that house will be reassessed so that the taxes go up from XXXX per year to XXXX per year, UNLESS I move into that house when my mother passes away, and she is XXXX XXXX XXXX and was gven " weeks to live '' XXXX XXXX XXXX XXXX XXXX XXXX so go figure. When that time comes, I want to be able to turn my XXXX property into a POSITIVE cash flow rental, and either retire, or find some " gig-work '' in California. But that time is NOT YET - so I wanted to get the loan to maintain my current situation, which includes the fact that it costs me {$200.00} round trip on XXXX every time I visit my mother. Obviously, I could eventually get a reverse mortgage on my mother 's house, when I inherit, but I don't want to to that - better to wait until rates come down, etc. Since rents in XXXX could be over {$2500.00} in my nieghborhood, while my first mortgage with XXXX- is only {$1000.00} before taxes and insurance. So yes it is going to be a positive cash flow rental as soon as I finish some fix-up, even if I just rent XXXX room or XXXX rooms to a XXXX XXXX  at XXXX the going rate - since I am only a mile from the XXXX XXXX XXXX  XXXX and so on.