People THINK! If your income was too low for the previous year according to your tax returns DO NOT FILE AN AMMENDED RETURN just for the sake of making your income appear higher. (A) that is mortgage fraud and you will be caught - just like we caught the lady today and (B) it may be tax fraud. I don't care if the local Sherrif, your real estate agent, or the underwriter at the lender told you to do it.
Normally when someone comes to us from 2 previous lenders and "have no idea why the loan would not close" and I ask them all the questions and get all the right answers I stay suspicious - just as I did yesterday when Madame M called. We finally narrowed it down, at least we thought, to the fact that she was dealing with a broker who only does Conventional and are not licensed for FHA. She needed an FHA 203(k) renovation loan because the home had been vandalized and all the copper stolen along with the a/c units.
They were pushing for a prequal because the home had been under contract for more 60 days and the contract was expiring .... yesterday. I told the buyer's agent (a very nice lady) there was no way I could give even a pre-qualification under the circumstances without seeing all of the documentation from the borrower to substantiate their assets and income. That's when the trouble started. When she gave me her tax return for 2008 all we got was an ammended return and not the full original return. The ammendment date? March 13, 2009. The original application date? Prior to March 13, 2009. Later she divulged to me the loan officer, allegedly, told her she needed to file an ammended return and make her income higher on her tax returns so her Debt to Income ratio would be in scope.
First, let me tell you, we spotted this in about 15 seconds just by seeing an ammended return and no original with it. Even if we had not caught it here the lady had not yet even filed the ammended return but only completed the form - or had someone complete it for her. That means when we would have done ALL the work, put the agent through all the time - both agents - locked the seller's property down for another 30 days when we got to the end we would have seen from the results of the 4506T that the taxes did not match!
Do I turn people in for this? YOU BET I DO! Why should two agents, a title company, an attorney, a broker, a loan officer, a processor, underwriting assistant, underwriter, quality control officer, and an underwriter (and those are just the minimum number of people involved) do all of their jobs - none of which are easy - just to end up finding this fraud AFTER all the work is done? Am I miffed??? YOU BET I AM!!!
You can NOT file an ammended return just to make your income look higher and expect that to work. What you can expect is to get convicted of mortgage fraud and maybe tax fraud, too.
ATTENTION EVERY ONE OF US: Mortgage fraud is going to be a really big issue over the next few years. When almost anyone could "qualify" to buy a home almost nobody felt compelled to commit application fraud. Most fraud then was committed by agents, loan officers and investors looking to make more quick bucks than they were already doing legally. Now you can bet fraud for shelter is going to be a BIG issue and you better prepare yourself to spot it.