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Old 01-13-2011, 10:58 PM
 
2 posts, read 9,620 times
Reputation: 13

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My loan app was recently turned over to underwriting at Wells Fargo. We got declined immediately because the tax returns they pulled from the IRS database did not match the current tax returns. The current tax returns for the two years in question were amended returns. WF does not have the ability to pull this amended info off their computer, according to IRS. We went to IRS and got statements and submitted them to our LO a while back.

Our amended returns show a balance of 35, 000 that we owed to the IRS. We sent a letter to WF earlier also that low income was declared for the two years in question because of child custody issues. Once the custody petition was over, which took over a year, we filed amended tax returns which we know will require us to pay the additional taxes owed.

Our file was submitted to the next underwriter after it got declined by the first one because of the mismatched IRS tax info. WF will call the IRS again to ask if we had a payment plan and IRS will say no, because we don't have any. We haven't even received a bill from the IRS. We know how much we owe but we have not sat down with them for an arrangement.

However, we anticipated how much this tax revision will cost us every month, and this expense is factored in with our monthly income already, meaning we have allocated funds for this in our monthly budget that we submitted to WF.

Now that the second WF underwriter has the amended tax returns, what would he/she do with the IRS issue of payment plan. We know why she would be interested in it because it's extra monthly expense. But, we also gave her a copy of an IRS policy that payment arrangements can be made for up to 5 years. Will she just then divide what we owe by 60 months and stop the issue at that point. As I said the allowance for this expense is alreadyfactored into our debt/income ratio.

How would WF handle this? I am a single father who has barely slept almost two weeks. I had missed work because I just couldn't function; too terrified to go out there and face the world. I fear I will have a heart attack. My credit score also went down by 30 points in the second pull but my LO said I'm still OK, barely though.

Someone please give me some thoughts or share some experiences along this line as I am losing my mind. I'm a single father who simply wants to purchase an old home for my young daughter. Everything is for her. Thanks Ed
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Old 01-14-2011, 06:01 AM
 
Location: University City, Philadelphia
15,961 posts, read 5,008,760 times
Reputation: 9590
You must NOT let these financial problems upset you and destroy your health.

I know, easier said than done.

What if you learn today you have inoperable cancer and have just three or fours months to live? Kinda puts things in perspective, doesn't it?

In May of '08 I was laid off my job due to the Recession. Month after month I could not find a job. I'm a homeowner and have mortgage payments to make. I was going crazy with anxiety, falling behind in paying my bills, my credit score dropping. I was afraid of foreclosure. I too was losing sleep, obsessing about my problems, feeling depressed.

It wasn't worth it. By January of '09 I found a job - paying much less than my previous job, but just enough to pay bills and catch up on my mortgage payments.

Life is about survival. We do what we can. Recently one of my best friends - a Professor at Drexel - had to file bankruptcy because a divorce a few years ago destroyed his finances. He had to borrow the $2000 to pay the lawyer so he could file for bankruptcy.

I know this doesn't really relate to your specific problem. I just want to say I too was worrying myself to death. Don't despair! Things will get better. If you can't afford to buy your daughter a new house, it is not the end of the world. She will not be homeless.
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Old 01-14-2011, 07:59 AM
 
Location: South Jersey
7,785 posts, read 10,452,198 times
Reputation: 2152
good advise.. ^^^^^.. just keep at it and it will work out.. Be strong.. Don't let it get you down..
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Old 01-14-2011, 08:10 AM
 
Location: Expatriate Philadelphian in Northern Virginia
7,783 posts, read 12,002,970 times
Reputation: 2249
While I sympathize with your situation, this isn't a Philadelphia-specific topic. I'm moving this thread to the Mortgages sub-forum within the Real Estate forum located further down the page. Best of luck to you.
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Old 01-17-2011, 06:22 PM
 
Location: MID ATLANTIC
4,032 posts, read 8,732,468 times
Reputation: 3042
Tax liens are priority liens - the lender must do everything possible to make sure the property will not be encumbered by a tax lien. $35,000 (plus interest) is not chump change. Absolutely, the underwriters should see the payment plan before making a decision. Did your estimated payment include interest?

You say child custody issues - I'm sorry, but something doesn't add up in your story. Are you saying you filed a false low income to minimise your contribution for raising the child? IRS overrides any PSA and Custody agreement, whoever has the child for most of the year gets the deduction. I'm sorry, but I'm trying to figure out how a child custody agreement would interfere with reporting taxes accurately.

I'm sorry you won't like my answer, but I don't think it's unreasonable for WF to want to know the terms of a superior lien.
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Old 01-18-2011, 10:11 AM
 
Location: Laguna Niguel, CA
768 posts, read 2,811,433 times
Reputation: 425
I agree with SmartMoney - underwriter won't just accept your word what the repayment amount is, they need a formal agreement set up with the IRS, and some underwriters will need you to have a history of on time payments per the agreement. Hopefully Wells Fargo will just accept a new payment plan and won't require the payment history.

Sorry you've lost sleep/work over this, buying a home can be stressful, but just remember that don't make any definite plans until the keys are in your hand, and the stress will be a lot less.
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