Letters to Mortgage Companies II

[Lion]

So, what do you do or don't do? Share your thoughts.

[jainen]

any of those

I don't do any of those. Mine are short but not at all sweet, I give them what they ask for but not what they want, and the only disclaimer I use is the one that says it's not a covered opinion, which is totally irrelevant to the mortgage company.

[Lion]

Thanx

Thanx, Jainen. I should've guessed that your letters wouldn't be sweet. Pithy? I might go for a pithy letter with some legalese at the end.

[jainen]

waste my pithyness

>>a pithy letter with some legalese <<

That's not it either. I don't waste my pithyness on them--once in an alternate reality I was a mortgage broker myself, and I can assure you those guys have no sense of humor at all. And you may have noticed I don't use "legalese" or jargon even with colleagues.

I give a simple, dry statement that I have prepared the returns for thus many years and included Schedule C which is normally used to report self-employment income.

[Larmil]

I just had a call for one of these letters. I consider it part of the service.

[BOB W]

Most......

...... of these requests are just asking for "How long have they been in business".

So I don't know what others are being asked to provide..?????

[Brian EA]

>>a pithy letter with some legalese <<

.

I give a simple, dry statement that I have prepared the returns for thus many years and included Schedule C which is normally used to report self-employment income.

This is exactly the way I do it. DRY

brian

[dsi]

I had a request from one company to provide some sort of assurance that my client was solvent and any refinancing would not change his solvency. NO WAY. Otherwise, my standard letter is plain and dry, only stating that the return included a Sch C which is the form that a self-employed person would use to report self-employment activity.

[jainen]

the question you don't want

>>Most of these requests are just asking for "How long have they been in business"<<

That's exactly the question you DON'T want to answer. All you know is that you prepare Schedule C based on information they give you. That doesn't mean they are actually self-employed or in business at all. Let the bank draw it's own conclusions.

[Brad Imsdahl]

I just had a call for one of these letters. I consider it part of the service.

I doubt you view it as part of your service to share the risk of your client's mortgage. If your client defaults on the loan, are you willing to help pay off the un-paid debt?

Of course not. Yet that could be what you are doing if you don't protect yourself with proper language in any written correspondence between you and the mortgage company.

[Larmil]

I doubt you view it as part of your service to share the risk of your client's mortgage. If your client defaults on the loan, are you willing to help pay off the un-paid debt?

Of course not. Yet that could be what you are doing if you don't protect yourself with proper language in any written correspondence between you and the mortgage company.

I give no indication of the clients financial situation. All I say is that I have prepared income tax returns showing self employment income from unverified information furnished by the client.

[Lion]

Thank you

Thank you. Client's mortgage company is asking me to add three statements to a letter that's much like everyone else's here. They want me to confirm what the broker told the lender on the application about the client having income from two businesses. The client has income from one activity and huge losses from another activity for a net loss. I don't think the client would even want me to provide that level of detail. Besides, he's undergoing an IRS audit that's going to reclassify one of his activities as a hobby for 2004 and 2005. They want me to confirm how long he's been in business; I wrote the specific years that I prepared his tax return which included Schedules C. Can't remember his third request. Client claims he's losing money and will sue me if he doesn't get the loan. He has a law degree (no, that's NOT one of his current C's; he's also a doctor and polo teacher and concert pianist and a few other things with a VERY pushy girlfriend who's a realtor), so suing me costs him no money....

He's also claiming I delayed the loan. I wrote my short letter the day requested, 19 January. Then 5 February, broker sent additional request -- which I refused. Do the client and mortgage broker typically work together for some time filing application, maybe with realtor girlfriend? Why did I have to answer before 5 p.m.? Couldn't they have given me some lead time? They needed an immediate letter two years ago for his last home purchase, which I provided same day service from home. (Don't remember how they first got my home telephone number.) Or, is this a lengthy process and then suddenly one day someone remembers that we don't have a letter confirming self-employment?

Anyway, this client left message on my home telephone swearing and yelling and telling me his lawsuit would make me pay the money he's losing. But, he wants me to take time off from tax clients to represent him in a far off city where his audit's been moved!!! Just needed to vent. All your comments have been very helpful for me to keep this in perspective. Thank you all very much.

[jainen]

His loan was denied

>>suddenly one day someone remembers that we don't have a letter<<

His loan was denied. Now the broker is trying to repackage it for a different program or lender that wants better docs. As you know, his own story can't stand on its own so he needs to shift it to others, like you.

I don't like to go beyond identifying the tax forms used, but I might (with written instructions from the client) use the word "revenue," which means gross income before deductions. Something like, "He has reported revenue on two separate Schedule C's since 2001." I used to not even say "reports" or "files," but if I have efiled the return I can now state that truthfully.

>>client left message on my home telephone swearing and yelling and telling me his lawsuit would make me pay the money he's losing.<<

This would change my relationship with the client. I would tell him he can pick up the letter in person if he signs a hold-harmless and indemnification agreement and a check for $250. I would tell him if he sues I will state in open court my exact reasons and that I will send a transcript of the proceedings to the lender. I would tell him I am withdrawing from the audit because at this point he requires legal counsel that I am not qualified to provide.

(At least, I like to think I would.)

[Lion]

Thank you

Thank you, Jainen, for your further thoughts. I had those same thoughts and am glad to know that I'm not over-reacting or as paranoid as my manager thinks and am not alone in my reactions to this situation. (Although, I realize I'm probably opening myself up to other appellations when I compare myself to you!) I thank you for taking the time to give me your thoughts from your experiences.

My district manager pulled his stock letter, vetted by legal, off his computer and signed it with his title and EA and faxed it to the mortgage broker. It says no more than my original letter in January and includes a long sentence about info provided by client, no audit, seek further info directly from client, etc., etc. Haven't heard another peep.

Mortgage broker had client send him two years worth of medical licenses to establish two years in business. The site in a post above listed the requirements for a no doc loan, including a CPA (I'm an EA, not a CPA) letter OR copies of licenses. Seems like they could've done that back in January. And, now that I'm responding I can't see the earlier posts, so a huge thank you to whoever (Dany?) for the sites and to everyone who posted their thoughts, advice, and perspective.

Ranting on my home machine to my family and anyone who might be visiting my home has certainly changed my relationship with this man. He's called multiple times, invoking our ten plus year relationship, how we need to move past this, and everything from HIS viewpoint (and this from a psychiatrist who should be able to look at this from my viewpoint, also!) except an apology. He says I accused him of fraud when I wouldn't confirm what his mortgage broker put on the application to the lender, that I let him down, that I cost him money if he loses this loan, that I owe it to him, that it's so simple to just sign the letter that the mortgage broker has drafted, blah, blah, blah.

I understand what many of you say about firing your most stressful clients each year and enjoying the improvement that results. Thank you.

[Jiggers]

...the more I read....

Spooks me.

One question. Did you get a signed authorization to do this letter and to disclose that he was self-employed or whatever was on the return that you prepared?

I think you should have because even disclosing the simple thing that he had a Schedule C is disclosure of confidential information.