We’ve got word that the IRS is rejecting some 3rd party 4506T’s due to potential ID Theft issues. Not only that but they can take up to 10 days to process after your borrower turns them in. This could be a real problem and you should look into it in your area right away.
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Great show guys, at least for as much as was there. Where’s the rest?
The show cut off at "So, what else did he . . . " Please re-send so we can figure out what Warren Buffet did or did not do. Thanks and Happy New Year!
what is a 4506?
This is a form that mortgage lenders must have the borrowers fill out to get copies of their rax transcripts so we can show that what the client's filed at the IRS matches the documents they brought in. At closing, the clients also sign this form again.
Leaving us hanging???
Left us hanging?
Sad state of affairs, the IRS is pointing to budget cuts for delayed services. Our local IRS office no longer will accept third party Form 4506 in person but requires Form 8821. After waiting 2 hours to get transcripts for a borrower who was a victem of identity theft I was informed by the IRS representative that they would no longer accept form 4506. Of course they want a wet signature, e-sign is not an option. A trip to my client's office and back to the IRS office for another 2 hour wait. Just wait for the upcoming tax season with a predicted 20% increase in identity theft!
Melinda Morgan Hipp
Shouldn't lenders be doing this as soon as they get the borrowers accepted offer and not waiting to closer to the closing date?
Actually, that was a few months ago that they were rejecting all of the 4506t’s. They came out with a new form, and have been completing the requests for about a month or two now. There’s no telling if they will go back to rejecting them but as of right now, they are processing them as requested.
You have to subscribe to hear the rest.
If I recall correctly. Wasn’t the idea of the 4506T was to reduce the fraud involved by the submission by the borrower of phony tax returns. So now the IRS wants the borrower to request “on line” a 4506T. Could not the borrower change the figures?
Julie Heniff 4506-Ts are ordered upon receiving the application with direct/correspondent lenders. Perhaps brokers have to wait until they know what lender they're placing the client with to order. Speak to your lender for details.
I don't think that is true… I already subscribe and it cut off for me too.
Julie Heniff – We do. Knowing that the return times have varied so much in the past, this is the first thing we (I) do (I'll speak for the rest of us lenders). Brokers are different as Edgar pointed out, it may not be until the loan is ready for submittal and in the lender's hands/system before their 4506T is ordered. Right now, we are seeing a 7day wait but if this is the case where we can't order 4506ts – we are going to need NAMB and MBA to put pressure on IRS to make the process more efficient. Think about if loans took 2-3 months because we can't verify tax transcripts.
Well, lenders could always go back to accepting signed 1040s……… and verify the income inputs with W2s matched with deposits etc. There's an algorythm somewhere… Of course they could always just get more down payment…. cash seems to cut through BS.
Hey you guys were cut off – great show till Brian stopped midstream in a sentence on minorities??? what the heck?
The video is messing up at the end… can you fix it so I can watch the last half?
Kristina Gianuario
The government is picking on all lenders stating they aren’t either closing enough minority loans or charging them a higher rate. In my 16 year LO experience, these minorities are the WORST when it comes to managing their finances. They charge up debt like crazy, then go bankrupt. It’s a way of life for them. Then they try to buy a home (oh because “God says they are entitled to owning a home” so I’ve heard so many times), and their credit scores suck. YES YOU HAVE TO PAY A HIGHER RATE!! Mortgage rates are based on credit scores for EVERYONE. Take better care of your finances and credit!!
Lets just give everyone a free home of their choice since regulators and lawyers can and will find fault with any loan. Of course the tax rate for everyone might go to 80% and no one will be able to afford utilities or food, but no one has ever said regulators or lawyers have any common sense. I am getting ready to take my grandson to dinner – which regulator do I check with to see which minority/ethnic owned restaurant I am required go to and how often? It has become a very scary world.
Ummmm…obvious answer here. Assimilate? Learn the language where you live and you might then be able to understand your loan documents. Well, post-Trid, no guarantees!
For your information, the town in Ocean County NJ you mentioned is pronounced 'Manna-HAWK-in.'
If you have the borrower in your office, you can place the call to the IRS with the borrower and request the transcripts be faxed to the office fax. We have received transcripts in about 30 minutes including the hold time on the phone waiting for an agent.
I closed a loan after 90 days of waiting on the borrower's sale of her existing property because their lender kept saying IRS was holding them up due to transcripts that had to be repeatedly reordered. I wonder if tha twas the problem here, the 3rd party was ordering them. No one could explain what was going on to my customer. I also experienced a situation in May of 2015 when the borrower's tax returns were not found. We were told the borrower could get their transcripts, however, the lender would not accept them from the borrower, So around and around we went until IRS finally acknowledged they had the returns. All the time we tried to get someone from IRS on the phone, and we were told that was not a possiblity, so I'm impressed that someone on this site actually spoke with IRS even after 30 minutes on hold.
About 70% of my clients are Spanish dominant, yet, in my experience, Spanish translated documents actually turn out more cumbersome for clients to understand because of poor, or use of literal, translations.
The government wants standard and fair? English only already is.
As far as paying more for credit, you'd be surprised how many prospects I advise to take their time to improve their credit score and thereby get a better rate but they don't want to bother. Often times going elsewhere, where they offer sub-620 credit score FHAs at a higher interest rate, because they want what they want when they want it. It's reminiscent of the subprime days. Perhaps companies can cover their behinds by adding a general credit score/pricing scale (ex. 740+ = Best Rates, 720-739 = Better, etc) to the credit disclosure already being mailed to clients upon pulling the report.
The best part of ALL of this is that the IRS is complicite in some of this ID theft mess …
I was told by an irs agent on the phone they could not fax transcripts. I need a number to call where they will talk to us and agree to fax….
Sabrina Linman
I'll get the number we called and post ASAP
Sabrina Linman
800.908.4490 prompt 1 then 4