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Old 04-30-2015, 01:54 PM
 
11 posts, read 13,126 times
Reputation: 13

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Hi,

Underwriting came back with 3 conditions for me:
  • Proof of a payment plan with IRS
  • Judgement Payments
  • Verification of Business (I am a self proprietor of a business not required to have business licensing)



The first two conditions aren't an issue, however my loan officer asked for a letter from a cpa. I usually file my own taxes unless I'm in a time crush and find a cpa near me to do my taxes. I called 2 previous accountants and the first company told me the woman who had done my taxes has left the company and they cannot write a letter on her behalf. The second accountant kept asking why he cannot just verify verbally with my loan officer, so I just gave my loan officer his number to see if he can talk him into writing the letter.

I suspect that this accountant won't sign off on this letter, so do I have any other ways to fulfill the last condition, or should I just prepare for a denial and move on?
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Old 05-19-2015, 08:18 PM
 
14 posts, read 19,446 times
Reputation: 12
Are you paid 1099 as an independent contractor? Do you do your taxes under an FEIN/TIN or your personal ssn?
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Old 05-19-2015, 09:25 PM
 
6 posts, read 11,777 times
Reputation: 18
I had a conventional mortgage and was also asked to provide a letter from a CPA verifying my business and likelihood it would continue. I explained to the mortgage officer that I file my own taxes so any letter I would get from a CPA would not mean much anyways since the CPA is not familiar with my business. He responded that it made sense and that seemed to take care of the request. I was asked to prove a YTD profit loss statement and balance sheet signed by me which I did provide. I do have a business license and have been self-employed for more than two years.

I think that if your funds for the down payment came out of business accounts then underwriting might be stricter about verifying your business. I was going to use money in my business accounts (I am a sole proprietor) but was told that if I did I would need a CPA letter to state that the money being taken out would not harm the business.
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Old 05-19-2015, 10:26 PM
 
14 posts, read 19,446 times
Reputation: 12
Same for me. We are currently in underwriting for a self employed FHA. I needed 2 years business taxes file from my CPA. Articles of organization for the LLC. CPA letter verifying business address and telephone number, proof of 2013 & 2014 TAX liabilities were paid in FULL.Then last but not least P&L statements for the last 2 years.
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Old 05-20-2015, 06:51 AM
 
Location: MID ATLANTIC
7,601 posts, read 17,629,190 times
Reputation: 8084
Quote:
Originally Posted by Henrietta6 View Post
Hi,

Underwriting came back with 3 conditions for me:
  • Proof of a payment plan with IRS
  • Judgement Payments
  • Verification of Business (I am a self proprietor of a business not required to have business licensing)



The first two conditions aren't an issue, however my loan officer asked for a letter from a cpa. I usually file my own taxes unless I'm in a time crush and find a cpa near me to do my taxes. I called 2 previous accountants and the first company told me the woman who had done my taxes has left the company and they cannot write a letter on her behalf. The second accountant kept asking why he cannot just verify verbally with my loan officer, so I just gave my loan officer his number to see if he can talk him into writing the letter.

I suspect that this accountant won't sign off on this letter, so do I have any other ways to fulfill the last condition, or should I just prepare for a denial and move on?
I have never had the accountant's letter condition be a problem unless it turned out the business hadn't been around for two years.

Verbal verifications don't work because in 3 or 4 years when HUD audits the loan, the telephone conversation won't be in the file. Besides, verification of who was on the phone is not verfiable. A letter has a signature or someone verifying facts. The company that prepared your taxes with the departed employee is feeding you crap by the shovelful. You engaged the company, not the individual. They are required to keep your records for 3 or 5 years. They can provide the letter you seek, either you don't want to ask, you are asking for the wrong thing or they aren't keeping the correct records.
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Old 05-20-2015, 06:53 AM
 
Location: MID ATLANTIC
7,601 posts, read 17,629,190 times
Reputation: 8084
Quote:
Originally Posted by llogie View Post
I had a conventional mortgage and was also asked to provide a letter from a CPA verifying my business and likelihood it would continue. I explained to the mortgage officer that I file my own taxes so any letter I would get from a CPA would not mean much anyways since the CPA is not familiar with my business. He responded that it made sense and that seemed to take care of the request. I was asked to prove a YTD profit loss statement and balance sheet signed by me which I did provide. I do have a business license and have been self-employed for more than two years.

I think that if your funds for the down payment came out of business accounts then underwriting might be stricter about verifying your business. I was going to use money in my business accounts (I am a sole proprietor) but was told that if I did I would need a CPA letter to state that the money being taken out would not harm the business.
That probably worked because your taxes showed you prepared them.
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Old 05-20-2015, 07:06 AM
 
Location: MID ATLANTIC
7,601 posts, read 17,629,190 times
Reputation: 8084
Quote:
Originally Posted by oakcreek1 View Post
Same for me. We are currently in underwriting for a self employed FHA. I needed 2 years business taxes file from my CPA. Articles of organization for the LLC. CPA letter verifying business address and telephone number, proof of 2013 & 2014 TAX liabilities were paid in FULL.Then last but not least P&L statements for the last 2 years.
The Articles seem a bit excessive, it makes me wonder why they wanted that - but that could have been proof how long you've been in business. Chances are your returns showed a tidy sum owed to the IRS, which is a potential lien against the business (and has been the reason for many a business' demise). P&L's are only requested for the periods not covered by tax returns, so you should have only had to provide the first quarter of 2015.
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Old 05-20-2015, 07:20 AM
 
14 posts, read 19,446 times
Reputation: 12
SmartMoney...again you are correct! Are you an Underwriter??

I had money owed in 2013 & 2014 in business tax returns. I had to show them both paid off. The Articles is probably to show the business was around for 2+ years, even though the CPA signed off it was...
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Old 05-20-2015, 09:21 AM
 
11 posts, read 13,126 times
Reputation: 13
Hi,

I just wanted to update that I am now clear to close after turning in my state business license and my p&l and balance sheet that I do myself every year. I am not a 1099 contractor either. Just basic sole proprietor.
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Old 05-20-2015, 10:02 AM
 
14 posts, read 19,446 times
Reputation: 12
WOW! Lucky you. I have a CPA that know his stuff and did my parents accounting for their hotel and I am in UW for the 3rd time. You are so lucky!

Glad to hear that you got the clear to close and a big CONGRATS are necessary!
Thanks for the update!
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