Debt to Income Ratios and AGI Adjusted Gross Income

This is my recent experience with Bank of America; however, it can happen with any lender.

I was recently denied a loan because of my DTI ratios. This would
have been my 2nd investment property purchase. I believe the reason is
because on my last investment purchase in 2009 I had 22,000 worth or
expenses that I deducted (above line deduction’s) on my sch. E and 1040.
You know..startup, repairs, cleaning, advertisement, etc... Thus, this
reduced my AGI Adjustable Gross Income by 22k. I thought underwriting
could have added back "one time extraordinary losses" i.e.
repairs/start-up cost back into my AGI. Presently my salaried annual is
around 62,000. The loan went to underwriting and… loan denied! I did not
add any additional debt, i.e. personal loans, credit cards, etc…

Had I know this underwriting benchmark, I wouldn’t have taken any
expenses that reduced would reduce my AGI. I did receive a nice return;
however, I may have bound myself for the next year, 2011, to purchase
any investment properties. At this stage… the return wasn’t worth it! With
interest rates as low as they are, a stifled economy, and a surplus of
homes, this is definitely the time to buy... buy.... buy!

A couple of ideas?

I still have my refund in full and was thinking... would it be a good idea to do an
amendment for 2009, redo my sch. E and 1040 and send the refund back??
In 2011 when I sign a tax release form with the lenders will they pull
the amended 1040?? I know underwriting averages the past two returns and
I don’t want my 2009 coupled with the upcoming 2010 returns to drag my
DTI down in 2011. I can show good cash flow with this upcoming returns

Drop Bank of America altogether and deal with my local community bank! You know... institutions that care!

Thanking you in advance for any insight!

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