Home Loan Modifications..pls explain

Can anyone that may be in the mortgage industry explain to me CLEARLY how the loan mod works. When they talk ratios i.e. 31% of your income is where the payment needs to be.. is that on net? gross? How do they figure that out? When you submit your paperwork to them, in our case a profit and loss sheet b/c we are self employed..how do THEY come up with the numbers for your income. Shouldn't they look at your retained income? Our home loan people are telling us it is a no go b/c our income is $203.00 a month. WHAT!!! Ok we are not rolling in it by any means but we sure the heck make may way more than that! Then going over it with the REP she agreed with us and said I have no idea how they came up with this. It doesn't look like they have even looked or considered your retained income. Our retained income is $43,000. This is AFTER exspenses. Something seems very wrong here. So they are suppose to have an underwriter call us. What are the chances of that happening??? Who the heck are these underwriters anyway that NO ONE can ever talk to, you can't leave them messages, write them letters, fax them anything..what the heck...ANY INSIGHT FROM ANYONE IN THE MORTGAGE INDUSTRY WOULD BE GREAT! Is there anyone here that has ever had a job as an underwriter or is one..would love to have a conversation. Thanks.