Update On Government Shut Down And How Banks Are Requiring The IRS 4506 Document
October 11th, 2013 categories: Month to Month, Mortgage Information, Real Estate Forum
Banks have adjusted their policies and will not close purchases without the IRS 4506. Some banks will require a signed document from you (buyer) indicating you understand a 4506 will be required after closing. Recall the 4506 is the document the IRS provides banks confirming that the tax returns provided to the bank by you actually match what was filed with the IRS. Below are generic rules banks are following depending on your specific situation…
Conventional, FHA and VA W-2 Borrowers
Banks will underwrite and close Conventional, FHA and VA W-2 borrower loans prior to receiving the 4506 transcripts.
1. A written VOE in addition to standard documentation and verbal VOE will be required. VOE is a verification of employment. The bank will contact your employer to verify certain information in writing as well as verbally.
2. The 4506 IRS transcripts will be obtained after closing.
Self-Employed Borrowers
Banks will underwrite and close self-employed borrower loans after receiving 2012 and 2011 complete personal tax returns signed by self-employed borrower(s).
1. Underwriting may require additional documentation to support tax returns (i.e. business tax returns, cancelled check made payable to the IRS for taxes paid or proof of refund).
2. Proof the self-employed business currently exists and is in operation will be required.
3. If the borrower filed a 2012 extension, a copy of the extension and a signed Profit and Loss statement for 2012 and YTD 2013 will be required.
4. For salaried borrowers, the most recent two years personal tax returns may be required.
As always call your lender with any questions!
Max A Kallos
404-277-5884 phone
678-298-8947 fax
[email protected]
recognized in ‘Atlanta’ Magazine as a Five Star Mortgage Professional endorsed by Emmy winning consumer advocate Dale Cardwell!
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