Loan Underwriters

[JohnH]

Every now and again a loan underwriter comes up with a truly outstanding display of ignorance about tax matters. A client is applying for a mortgage and their return reports income from an S-corporation. So today they sent an inquiry fort he underwriter which says there's a "Page 2" of schedule E but not "Page 1." Don't they have little checklists which would say something to the effect that a "Page 1" is only required if the applicant has rent or royalty income? And wouldn't the absence of a Page 1 validate the fact that the applicant didn't report any rent or royalty income on their application?

[veritas]

I didn't think

It possible, people more annoying than life insurance salesmen.

[AZ-Tax]

Tax Return Transcripts

Client the other day needed copy of tax return for their kids FSA. I get a call a couple days later from the client asking me for their tax return transcript. I replied those can only be obtained thru the IRS. I am surprised the UW for the Loan Co. didnt request a tax return transcript vs a tax return.

[Gary2]

Let's be fair. They're given limited training on reading a personal tax return, but certainly not enough to be able to prepare one. I wouldn't, for example, expect them to know whether a 4797 was required or it it was done correctly. I've read about worse complaints - not accepting returns marked or watermarked as copies or returns not signed by the original preparer, etc.

I'll extrapolate from what AZ said: These people should be educated to not even ask for the copy, but instead provide their clients with a 4506T or 4506T-EZ, with their info already filled out in the section labeled "third party (such as a mortgage company)". That will avoid questions such as "prove this is the tax return you actually filed", "where is the preparer's signature", and "where is the missing page". Perhaps it would help to provide our clients with the 4506T-EZ, with the "mortgage company" highlighted, whenever these issues arise.

[Jesse]

Perhaps it would help to provide our clients with the 4506T-EZ, with the "mortgage company" highlighted, whenever these issues arise.

I think that's a great idea!

[Roberts]

I just had to take out a loan to buy a rental property. Gave them a signed 4506T-EZ to get my tax transcript (which they requested) but they also wanted a copy of the returns I filed. Their argument was that they wanted to verify both contained the same information. My guess is they were checking on my honesty. What was really odd was they wanted a SIGNED copy. I tried to explain it was e-filed so I didn't sign the 1040 but they demanded it be signed anyway.

[JohnH]

I don't mind verifying that I prepared a return from information provided by the client without any verification on my part.
Then comes the final paragraph:

"I hope this will be sufficient for your records. If you require additional information regarding the filing of the returns for these years, you can file Form 4506-T (Request for Transcript of Tax Return) with the IRS, which is the appropriate method for obtaining this information for quality control and due diligence purposes. The response to a properly filed 4506-T can usually be obtained within 24 – 48 hours."