Is it really an FHA requirement to have the actual tax transcripts? Or is this a lender requirement?

Asked by cantwaitforclosing, Richmond, VA Wed Oct 31, 2012

The lender (BBT) just announced to me they haven't been able to obtain my parents (coborrowers) 2011 tax transcripts. And the underwriter will not sign off until that condition is closed. The taxes haven't been processed yet and therefore the transcripts DON'T EXIST yet. The CPA lied about when the filed- said they did it the last week of September and didn't actually file until the extension deadline of October 15th! But that doesn't help me. I contacted my tax advocate who sent me a copy of the filing and said that is proof we submitted them and that they are being processed, but that they cannot get my transcripts until they are actually processed.

I will miss my closing date if they force this issue. Is this ACTUALLY an FHA requirement or are they just saying that? If it's not an FHA requirement can I contact and go with a different lender? My parents are WAY over qualified for this loan and we have provided every last piece of documentation that the bank has asked for. HELP THX

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brent mendelson’s answer
brent mendel…, Mortgage Broker Or Lender, Bethesda, MD
Wed Oct 31, 2012
It's not FHA, it's Fannie and Freddie. It is a requirement of every bank and lender, don't switch now.
Ask the lender what can be done NOW? Call the IRS line and see how long? 800-829-1040. Be prepared for a long wait like the rest of the day. If you take them to an IRS office will they stamp them and will this be accepted by the lender. There are things that can be done to speed it up but the lender needs to see if they can make it happen. It's not easy but you are within your right to ask how they assist and speed it up. Just remember it's not easy as it sounds I know. Good luck and let us know how it turns out.


Brent Mendelson
Senior Loan Officer
1ST Mariner Mortgage
Lending in all 50 states
1 vote
Thanks. I have already called the IRS (fyi, if you simply call and don't click any options... just wait on the line... you are put through directly to a human. It only took me 10 minutes) BUT they still cannot help me. The fact that they were just filed puts me in no place to beg for a rush.

Can you clarify what you means by it's not FHA, it's Fannie and Freddie. I don't know what this means... I am getting a loan from BBT insured by FHA- I'm confused as to what Fannie and Freddie have to do with that. Please clarify for me. THANKS!
Flag Wed Oct 31, 2012
Beth Grant, , Virginia
Wed Oct 31, 2012
It is usually a requirement of the automated underwriting system that the Lender uses, in order to verify the income, check for expense write-offs, etc. A big concern, here, is why the CPA would lie about the date the taxes were filed. I believe the lender will have a problem with that. You can ask BB&T if they would accept the information from the tax advocate directly, or in the past, I've known of people that have taken the tax returns to IRS in person and had them stamp EVERY PAGE and then taken that to the Lender .. in this case, though, where the taxes have already been filed and you're waiting for the transcript, you really can't refile. I would suggest your contacting a local lender in Richmond ...Jerry Mabry is the CEO of Village Bank Mortgage. Try 804-330-9800. That is the main number; I don't have his direct line. He will be honest with you and let you know if there's anything they can do or if you're out of luck without the transcripts. Also check with BB&T to see if there is any way to expedite things or if they can use the proof of filing ... Best of luck!
0 votes
Why did they lie? Laziness is my guess. As in "Oh yeah, I'll file them right now" And then they didn't. So they lied to cover their a** and then assumed I would never find out. Which I'll give them that it did take me 3 weeks to find out... Again, no one knows they lied, but me and the internet ;) I called the IRS tax advocate today and she sent me some document that she said "financial institutions accept" so it basically proves that I filed the return I sent it, and that it is being processed. My loan processor "had never heard of that" but she's "checking with her manager to see if the underwriter will take it" What I want to know is, does the underwriter have any leeway to accept something other than the actual transcript? Thanks!
Flag Wed Oct 31, 2012
Annette Levi…, , New York, NY
Wed Oct 31, 2012
Bryan, No underwriter will accept a tax return from the CPA with verification of filing. The CPA lied before, why trust him now.
can'twaitforclosing If the CPA had showed the extension for filing and the '09 & '10 tax returns, that would have been okay with:
Self employed-audited P&L
Wage earners-last paystub for 2011.
At this point you will need to ask for an extension.
0 votes
An audited P&L costs thousands of dollars, and weeks (probably a month) to obtain. So that's not really an option. The lender doesn't necessarily know the CPA lied- for all they know it was just a misunderstanding. Can they legally accept that? They are blaming FHA- so my thought would be if it's not truly an FHA requirement then it's their discretion. It's just so annoying their didn't tell me they didn't have this until now.
Flag Wed Oct 31, 2012
Brian Rayl, Agent, Dallas, TX
Wed Oct 31, 2012
Yes, it is a requirement, but the bank should be able to accept the copy of the return from your CPA with verification of filing. Ask your lender if they will accept that. If they won't, call the IRS and see if there is any way to rush this (be forewarned: I've heard of this increasing the chance of an audit).

Don't switch lenders. The new lender will need the same info.

Best of luck sorting this out.

Brian Rayl
B&B Realty Group - Keller Williams Elite Dallas, TX
0 votes
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