4506-T I refuse To Sign

If you still owe the IRS money it will hurt you in the case that they placed a judgement on your property or your credit report. If this is the case a lender will not close until the lien is satisfied.

The best bet for this scenario is to ask your broker to seek a No Ratio loan! These loans are very hard to find now because fannie mae has done away with them but Amtrust Bank will do them portfolio now at a slightly higher rate. Good Luck!

i am worried that my loan may come back denied due to I overstated my income at the advise of someone else. Everything was moving pretty fast then my underwriter requested a copy of the 4506 from the broker and I haven't heard anything in 3 days.

what next......

What is your actual income and what did you state? It normally takes 3 days to get your tax transcripts back.......Normally the underwriter is not looking for actual income but to see that you have filed taxes.......what is your loan amount? What is your job description? Most lenders use salary dot com to determine if your stated income is reasonable.

Hi Whats Next,

If the lender submitted the 4506 form and the income is incorrect then your loan will be turned down. Not hearing from the broker is not a good sign. There are programs that do not require a 4506T to be signed and that's the program that your broker should have suggested. I can give you more information on those programs if you would like.

I'm eager to know about programs which don't require a 4506 form. Would you mind naming a few and detailing them Lisa?

Hi Roger,

It is called a NIV loan which stands for No Income Verification. This type of mortgage does not require you to state your income on the application and thus does not require a 4506T to be signed since there is nothing to verify. The rates are a little higher. Without knowing your credit score or equity position, I would say that it's generally 1/4% to 1/2% more. That translates to an interest rate of 5.75% to 6.25% on a 30 year fixed rate mortgage. Stated Income loans are the ones that require a 4506T to be signed.

Here is the difference: Stated Income means you put the income on the application but they don't verify it initially. However, they do have the right to verify it down the road. If it does differ from what is on your application, then you and your broker can be liable for fraud.

The range of documentation types runs the gamut from full documentation to no documentation. Below is listed a brief explanation of each type.

1) Full Doc (umentation): This is the most common type of mortgage
documentation. With a full doc mortgage you will normally be expected to
provide complete proof and documentation of all income sources and asset
sources. You can usually be expected to provide at a minimum; your last 2
paystubs, your last 2 years W-2 forms, your last 2-3 months bank statements
for each bank account that you have (full statements and not just the first
page), your most recent 6 months 401K and/or IRA statements. With many sub
prime lenders, you can substitute your last 12-24 months bank statements in
lieu of both pay stubs and W-2s.

2) Limited Doc: A limited (lite) doc mortgage generally will use as little as 6
months bank statements to prove income. Otherwise it is like a full doc
mortgage.

3) Stated Income/Verified Asset (SIVA): With a stated income/verified asset
mortgage you simply state what your income is, though it has to be
reasonable to the type of work. Like the full doc mortgage you will need to
verify your assets with documentation.

4) Stated Income/Stated Asset (SISA): With a stated income/stated asset
mortgage, you state both your income and what assets you have. These are
not verified.

5) No Ratio: This mortgage type has no income associated with it. While
employment information is required, the income amount is neither shown nor
disclosed. The only information that is verified with the employer is that
the borrower is employed there and for how long. Assets will normally be
verified with this mortgage type.

6) No Income No Asset (NINA): With this mortgage type, neither income nor
assets are shown. As with a no ratio mortgage, employment is verified.

7) No Documentation: A no doc mortgage is just that, there is no documentation
required to be approved. This mortgage will be strictly based on the
borrower�s credit score and depth of his/her credit history.


This is simply a brief synopsis of mortgage documentation types. Virtually all mortgages will be one of these types. Lenders may call them by different names, but they will be one of these types anyway.

The need for a 4506 is based on either the lenders underwriting guidelines or the guidelines for the specific loan you are applying for.....NIV can actually be either a stated income loan or a no ratio loan......the fannie mae program which offered both until this week did not require a 4506T for either documentation level.

Hi Roger,

Are you looking for a no income verification loan?

Does anyone know of anyone who can refinance for me? Here's my situation:
Credit: mid score of 800 or 805
2006 taxes: $165K gross
2007 taxes: $106K gross
2008 I changed to being self employed. The taxes will not be ready for a couple of months, and because of the startup costs involved in the business, the income will look very low for the year.
House Value: $400K
Mortgagee: $303K
Credit Card Debt: less than $5000, usually paid off monthly

Do I need to do a stated income loan? I keep reading of having to sign some sort of IRS form, would that help? Or are there any loans available that can go just off of taxes from previous years? I am fearful that if I don't refinance before my 2008 taxes are filed that I won't be able to do it. I also worry that rates will go up after an election year. Any help would be great. Thanks!

Mark
"markanthonygreen42@hotmail.com"
[Link deactivated as per forum rules. Thanks.]

Hi Mark Green

As far as I know, in case of stated income loans, the lender normally want to see a 2 or even 3-year history of self-employment with verification in tax returns. In your case, you will not even be able to show one year of self employment, I don't think lenders will be ready to give you a refinance.

You can check out the no-doc loans. In this case, mortgages are given only to the creditworthy people who can afford to pay for it. However, keeping in mind the current market situation, I am not sure whether lenders will be ready to give a stated income loan or a no-doc loan.

Thanks.

I am a salaried worker and I have not filed my last year's tax return. I can provide W-2's for the past two years. Will the lender require me to sign a 4506-T form? I plan on buying a home in the next 30 days and trying to wait for my most recent W-2 and I will file both returns.

Originally, way back when, stated income loans were started to simply reduce the paerwork required.
Over the years that turned into stated income loans to state income that was not actually on the paperwork. That worked out to the advantage of self employed persons who did not report all their income and/or had large business expenses to reduce the taxes they had to pay.
Today, there are fraudulant bank statements and pay stubs and W2s made up with Photocopy or other systems, so, the lenders can not trust what they see on any documents.
You should not sign a Form 4506-T if it could show that income on the mortgage application is not as shown on the tax returns or not as shown on the pay stubs and W2s because if someone checks after closing, they will call the loan due.
There are stated income loans in some states still available that do not require the signing of the IRS Form 4506-T. They are usually with 25% to 35% down payments and verify assets in line with income.
We do them in NJ and CT and nine counties in NY and five counties in PA.

We must first understand the difference between the 2. The 4506 is going to verify the income, while the 4506-T form will only verify they have filed Schedule C's. I'm suprised no one has clarified the difference between the two. Good Luck.

James Kennedy
RBI Home Loans
732.979.7409

we are finding that more and more, investors (yes - investors and not the lenders) are requiring that borrowers sign a 4506-T.

What exactly is shown on the transcripts sent back after filling out a form 4506-t?

James, you mentioned that it is only to verify that Schedule C's are filed, but not to verify income. Does this mean that the income is not stated on the documents that the lender receives after requesting one of these forms?