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I am a salaried employee. Why the Tax Returns?

Mortgage and Lending NMLS # 234057

In this current environment where we are suffering from the abuse of fraudulent lenders, realtors, appraisers, title companies and, yes, buyers, the lenders are leaving no stone unturned.

When you apply for a mortgage you sign a form 4506T from the IRS. By signing this form you are allowing the lender to request a transcript copy of your tax returns for the previous two filing years.

The underwriter will review and compare to your W2s. That matches great.

The underwriter will then review to see if there is any additional information on the document that may not have been disclosed on the application (due to oversight, of course). These items could be: child support, unreimbursed expenses, losses due to a side job (Mary Kay, Avon, auto detailing business, etc). This is where UW would find interest paid on another mortgage that may not show on the credit report. Taxes on a property that was not listed. K1s from a business that borrower owns but does not operate.

In an earlier posting, I stated that a good loan officer closes your loan a great one makes it less painful. 

Captain Wayne - Rowlett Real Estate School
Rowlett Real Estate School - Panama City, FL
Rowlett Real Estate School / Owner and Instructor

Very informative post you have there Claudia Gravelle! Welcome to the Rain and I hope to see many more posts from you!

Jan 06, 2015 06:55 AM