Effective immediately: 4506-T now required an all Stated Income/Stated Asset (SISA) loans.

     I have received notices from more than ten of my lenders this week, so I thought it was important to throw it out there. More and more mortgages have been obtained without verifying the income, or other financial data, of the borrower. These loans are called no income verification, no income-no asset verification, and no ratio. What we do is simply verify that the borrower is either self employed or a salaried employee. This verification is done verbally and with a third part such as a manger, human resources, CPA or attorney. The income stated must make sense for the job description and the borrower is typically required to have a minimum of 6 months mortgage payments in the bank post-closing.
     Easy…right? Wrong. A new and improved twist has been added to the mortgage mix. More lenders are now requiring the IRS 4506-T to be signed and dated by the borrowers during the loan process and again at the closing. (The form can be used within 60 days of the signature.) This form allows lenders to obtain an electronic transcript of the borrower’s tax data directly from the IRS. The information can be obtained within 2 business days via electronic transfer and will outline the borrower’s income and tax information for the past two to four years. The change is that it used to be done though a paper process which took a long time, so a lender did not always require the 4506-T to be completed. Electronically, it can be done very quickly and lenders will require it on all loans…just because they can.
For those of you out there getting a mortgage without having to verify your income, be aware of the new and improved IRS Form 4506-T. Be aware of the following:

• Sign and date form
• Fill in the tax years to be requested (up to four years)
• Cross out and initial any section that is intended to be left blank
• Ask the lender how many times you will have to complete this form (during the application and/or at closing)
• Make sure you know that you have to complete the Form 4506-T prior to beginning the process
• Make sure you want to do this type of loan
• There is a charge for this ($4.50 to 9.00), which will be passed onto the borrower