Fannie Mae just announced another change in qualification guidelines. This change includes qualification for 5-Yr. ARMs at the note rate plus 2.0% or fully indexed rate, whichever is higher. Plus, starting June 1, lenders will have to run a second credit report right before closing. Add to other recent changes which include verification of income on FHA Streamline Refis and lenders pouring through tax returns with magnifying glasses to find something wrong.
Bottom line is that not only do we need to verify the income of every applicant, it will be much harder to qualify them when we do. Today you can't afford not to be an expert in tax returns. How can you not go into battle with an underwriter without knowledge on your side? Keep in mind that many underwriters are not well trained with regard to analyzing tax returns. This means that the results are often unpredictable. Adding to our never ending list of new hats as professionals that we have to wear now, it is in your customers best interest to be fully knowledgeable on analyzing tax returns.