Financing in 33414>Question Details

Jc9794, Home Buyer in Florida


Asked by Jc9794, Florida Wed Dec 14, 2011

My story: I am in the process of purchasing a short sale home. The transaction is 90% complete. The hang up is on my end with my loan company. During the loan process it was discovered that I did not file my 2010 tax return. The lender is asking for a transcript. I did send in a payment when it was completed in 4/2011. The IRS cashed the check, but I did not send in paperwork. I sent in the papework 3 weeks ago and it can take up to 8 weeks for transcript. My closing is in 20 days. We asked the lender if showing them a copy of the cleared check and a copy of the tax form stamped by the IRS that is was received for processing was sufficient enough to process the loan, they said NO. My mortgage broker said that becuz of the market issues from the past, this is standard pratice from lenders. IS THIS TRUE? If not, I want to be able to get financing that can work with me and my situation. Thank you to all in advance for your advice.

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Rob Weber’s answer
Actually Steve, the main reason lenders will NOT accept anything other than a 4506T result from the IRS is due to rampant fraud. When Fannie/Freddie/Ginnie have a defaulted loan, they do a thorough investigation to see if they can make the lender buy back the loan. Instances where documentation can't be proven to be authentic is reason enough to declare a material finding and force the lender to repurchase the loan (can we say "Countrywide"?).

You can't get a stamped return back from the IRS until it's been processed in their database and when you can, you can also verify it's existence via a 4506T. Any lender who accepts what you suggested hasn't been burned badly enough yet with repurchases but they will eventually.

On a side note, if you meant "stamped" as in someone at a local IRS office stamped it, that doesn't mean anything unfortunately. Someone could still submit a 1040x and rescind or otherwise modify that report that was just sent in.
3 votes Thank Flag Link Wed Dec 14, 2011
Sorry Jc if my response was brutally honest but it's the truth and that's what consumers like yourself, myself and the rest of us want to know and hear at the end of the day.

P.S. A 4506T is really the only way to verify a document's authenticity. A fax can be faked but a independent third party vendor removes the liability from the bank and is a non-interested party.
2 votes Thank Flag Link Wed Dec 14, 2011
Sorry Jc9794, your current lender isn't doing anything out of the norm. Until your tax returns are filed you can not close. Standard practice in todays lending environment.
2 votes Thank Flag Link Wed Dec 14, 2011
I don't know if you tried this or even if it will help expedite what you need - - but have you tried the Taxpayer Advocate's office. Here's an IRS link that will help you locate the Taxpayer's Advocates office(s) in Florida.

Maybe, just maybe, that office will understand your plight and the immediacy of getting it solved for you!

Good luck and hang in there!!!
Web Reference:
1 vote Thank Flag Link Wed Dec 14, 2011
Okie dokie, the problem originates from two places, DU will always require cross verification of income and one is the tax transcript. FYI the lender must pay for that and it isn’t cheap. Want some more insanity? We must pay for information they already have so we can give them a copy, I don’t know, I just work here…. The second spot is investors that purchase the loan also require them. The lender is only filling the order from the secondary market.
The IRS has an 800 #, get ahold of someone in the home office, it is in Texas, ask for their help. Coordinate with your loan officer, my shop will accept the doc as long as it comes directly from the IRS. Otherwise the lender will use a credit provider, and that may add to the timeline.
1 vote Thank Flag Link Wed Dec 14, 2011
Again, Thanks to all of you that have answered. You have been putting my mind at ease with your responses.

Thanks Bob for your encouragement. Sorry I did not mention, but my broker has pushed our paperwork as far as it possibly can go, the extension was just signed however, the lender is going to hit me with 100.00 per day. Close is now set for 29th. I guess the question now, what is my financial threshold on the per diem.

btw, this 'normal' sucks! haha
1 vote Thank Flag Link Wed Dec 14, 2011
Jc- From the straight candid answers you have you can see where you are ! This week

is the 4th week of the possible 8. Work on tightening up - Get an extention from all pariies

for a closing delay, take your' proofs' to convince them the're waiting on something- firm up the

file make sure there are no other "paper work " snafu's! Changing lenders will cause even

greater delay and send signals of instability possibly loosing your deal. Hang in there! You are

now experiencing what " normal " is. Get to your closing! Best of Luck!

Web Reference:
1 vote Thank Flag Link Wed Dec 14, 2011
I am calling the IRS everyday in hopes to get lucky and the process has started. If I was to go to the lender and offer a letter and affidavit from my accountant and "True and correct copy of return on file and then signed by the IRS rep" what you said, might be a shot? If this lender is stalling this, would it be best to use this new information with a new lender and see where it goes?
1 vote Thank Flag Link Wed Dec 14, 2011
The answer is true. People were making the IRS stamps and using them as verification that the IRS actually had the returns on file. But your lucky in 1 respect. The IRS is only going to take 8 weeks to be able to show the transcripts. I've had to shut down a loan for 3 months waiting for a transcript. But all things equal, a copy of the cancelled check along with a stamp and signed copy from the IRS should be able to pass muster, but some banks choose not to use common sense. With that being said, tell your broker to start climbing the chain of command. There is an underwriter supervisor, and whats typically termed VP of lending etc...over the underwriter. Make sure the returns have the stamp and a blurb such as. True and correct copy of return on file and then signed by the IRS rep. That may get you through it. But confirm with the lender prior to wasting your time

Steve Vinson
Clearwater Federal Mortgage
NMLS #314005
1 vote Thank Flag Link Wed Dec 14, 2011
You mentioned this is a Short Sale... you may want to tell them you will not agree to pay $100 per day for a late closing. It should be negotiable...

Good luck!

All the best,
Alma Kee
0 votes Thank Flag Link Wed Dec 14, 2011
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