Home Buying in Menifee>Question Details

Maddox, Home Buyer in Menifee, CA

Unreimbursed Business Expenses and FHA Home Loans- UBE subtracted from Income

Asked by Maddox, Menifee, CA Sat Mar 9, 2013

I just started the FHA home loan process, I was told because I filed unreimbursed business expenses on my 2011 and 2012 tax return that those amounts would be deducted from my income. I would like to just amend my 2012 tax return so this issue goes away. Is necessary to amend my 2011 returns as well? Is this an acceptable action or will the Loan Underwriter still want to lower my income?

Help the community by answering this question:

Answers

10
Good morning Maddox,

My mortgage professional colleagues Claudia and Brad are correct: it's too late to amend the tax returns at this point. To do so would likely be considered as mortgage fraud because you're taking an action ONLY for the purpose of qualifying. In other words, the deducted expenses were good enough at the time to gain a larger tax refund, but now that you need a mortgage, you're willing to take the "self-serving" action of amending the returns, removing those deductions only to help you qualify.

Unfortunately we see this situation all too often; most of us experienced professionals catch this at the Prequalification stage.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a "Thumbs Up" or a "Best Answer." Thanks!
2 votes Thank Flag Link Thu Mar 21, 2013
You have up to three year from the due date of the return to amend it, so you still have time to amend them. Any valid expense can be deducted and should not be considered fraud if you can substantiate the expense.
-Holly Hohenschuh, CPA
Flag Thu Aug 28, 2014
Do I have news great new for you or anyone like you. I am a Direct Lender / Mortgage Banker and we have an Investor that buys our loans after we close that DOES NOT require 1040s Federal Income Taxes unless you are Self-Employed. If you are a regular ole Wage Earner, W-2's employee I only need your W-2s for the past two years and 30 days paycheck stubs for income documentation. This is an awesome program and a life saver for those who filed their taxes but didn't know the consequences for filing an IRS Form 2106. But now...I got you covered!

Let me know if you need my assistance,

George Raymondo
Branch Manager
American Financial Network, Inc
Licensed in 28 States and 6 more coming online soon
Web Reference: http://www.AFN-Loans.com
1 vote Thank Flag Link Mon Feb 24, 2014
HI George, I looked at your website and the required documents do include Tax Returns for the past 2 years. I actually have the same problem, so i would be interested in applying only with W2 and pay stubs. Thank you, Desi Scarborough
Flag Thu Apr 3, 2014
ICC Mortgage And financial Services, Is a sincere and certified private Loan company approved by

the Government, we give out international and local loans to all countries in the world,Amount

given out $2,500 to $100,000,000 Dollars, Euro and Pounds.
We offer loans with a dependable guarantee to all of our clients. Our loan interest rates are

very low and affordable with a negotiable duration.
Available now
MORTGAGE, PERSONAL, TRAVEL, STUDENT, EXPANSION OF BUSINESS AND NEW UNSECURED, SECURE,

CONSOLIDATE
AND MORE
Available now..
Apply for a loan today with your loan amount and duration, Its Easy and fast to get. 4% interest

rates and monthly installment payments.
{gregorylawson.icc@gmail.com}

Regards
Gregory Lawson
0 votes Thank Flag Link Mon Jul 14, 2014
ICC Mortgage And financial Services, Is a sincere and certified private Loan company approved by
the Government, we give out international and local loans to all countries in the world,Amount
given out $2,500 to $100,000,000 Dollars, Euro and Pounds.
We offer loans with a dependable guarantee to all of our clients. Our loan interest rates are
very low and affordable with a negotiable duration.
Available now
MORTGAGE, PERSONAL, TRAVEL, STUDENT, EXPANSION OF BUSINESS AND NEW UNSECURED, SECURE,
CONSOLIDATE
AND MORE
Available now..
Apply for a loan today with your loan amount and duration, Its Easy and fast to get. 4% interest
rates and monthly installment payments.
{gregorylawson.icc@gmail.com}
Regards
Gregory Lawson
0 votes Thank Flag Link Mon Jul 14, 2014
If you are W2 Employed can provide and approve FHA and conventional home Loans in every city and county in Florida without counting your reimbursed expenses against you.. http://www.florida-mortgage-lenders.com/


apply at http://www.florida-mortgage-lenders.com/
0 votes Thank Flag Link Tue May 13, 2014
If you are a W2 wage earner then a lot of lenders out there do not look at your tax returns. This to include First Mortgage, Kern Schools federal credit union and many others do not require tax returns from W2 wage earners and would never see your 2106 Expense. They also do not pull IRs tax transcripts, they just pull W2 validations.. The banks I deal with also have that same policy. I still ask to see my clients tax returns so I can look for the 2106 expense and make sure I don't qualify the client for too much home. Many lenders today don't have investor overlays so they will qualify you to 57% Debt to income ratio, The loan officer has to be very responsible to make sure you are not getting in over your head. A foreclosure will go on the loan officers record and we also do not want to hurt anyone who is making emotional decisions of buying too much or speculating. This is a touchy issue and the loan officer has a lot of responsibility to do the right thing and make sure you can afford the payment. I had clients that had negative payment shock or spouse income we cannot use do to credit issues affecting the interest rate. I have no problem qualifying these clients to the max the government allows if there real DTI is under 43% and payment shock is not an issue.
0 votes Thank Flag Link Fri Jan 24, 2014
The tax returns are a barometer of how your income will look in the future.
Lender is going to pull your tax transcripts and see those expenses.
My UW would not accept that b
0 votes Thank Flag Link Sun Mar 10, 2013
Some lenders consider amending tax returns to claim you didn't have 2106 expenses in order to help qualify for a larger loan to be equal to tax and mortgage fraud.

If those are real 2106 unreimbursed expenses required to do your job, than that has a large impact on income and needs to be considered in your ability to re-pay the loan.

If you made up those 2106 expenses to reduce your taxable income, then amending them is the right thing to do....but now the lender has a known and admitted tax cheat they have to consider loaning money to.

I don't have an opinion either way, but that is how it will be looked at by many lenders. You will need a very solid reason to explain who you mistakingly filed 2016's two years in a row or document that your employer is now paying those expenses.

I have seen it take 4-6+ months for 4506T transcripts to reflect the amended returns...and because it's right in the middle of tax season, will take a while most likely.
0 votes Thank Flag Link Sat Mar 9, 2013
They will have to average the two years, so if amending 2012 will lower it because it's divided by 24 rather than 12 you might qualify, but your transcripts will have to be able to be pulled which will take a minimum of an additional 3 weeks so get filing right away and ask your loan officer if just one year will help.
0 votes Thank Flag Link Sat Mar 9, 2013
If you are doing a USDA RDL loan in Menifee, CA you do not need to turn in your 1040s for to me only W-2s unless you are self-employed. If you have to do a FHA loan because you exceed the maximum income limits of $77,050.00 for a family of 1-4 or $101,700.00 for a family of 5 plus, you will be required to turn in the most recent two years tax returns, and you will be hit with any 2016 unreimbursed expenses you claimed. My company has a policy regarding amended taxes, and I do believe we are as liberal as any lender out there. The rule allows any borrower to have amended taxes along as it is only one year (not both) AND the new amended taxes will pull up via a 4506-T. Let me know if you have any questions.

Best of Luck!

http://www.trulia.com/blog/george_raymondo/2011/03/usda_loan…
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Sat Mar 9, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer