Mortgage and missing w2 on returns HELP (loan officer, 2014, income tax)
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I am in the process of getting a mortgage on a Fannie Mae REO property. Everything looked good as far as assets on hand, credit, employment until I looked over my tax returns (they're requesting 2013/2014). On my 2013 return my wife when filing made a mistake and did not include a w2 from a new job that I had started in September. Taxes were filed though so a transcript is available. The issue with this is that if I provide the lender with both w2s upon pulling the 4506-t the income on it will show around 17k less than what I actually made and w2s show. I am a w2 employee non-exempt salary which means I get my salary plus any overtime accrued. I plan on amending my taxes upon figuring this out, but am afraid I will not have time to do so and close this deal due to the "time is of a essence clause". Will this be a huge flag for the lender, or can I just provide my w2 that was actually filed and omit the non filed one? The only issue I see is that employment will show as started 09/2013 but there will not be a corresponding w2 for the 3 months. I am at a loss here. I have not been able to ask my loan officer as I just discovered the issue Thursday night and she is out of the office until the 6th. Has anyone else ever had this issue? Is it a deal breaker and will I be required to amend or can I continue forward since that income is not used to qualify me anyhow? Any help is appreciated!
Amend the return, and physically take it, and a cashiers check for additional tax owed, to your local IRS office. Get STAMPED copies and receipts of everything. Make a copy of the cashiers check. When you get the cashiers check, ask for a Month to date printout of the bank account from which it came, also STAMPED by your bank.
If you cannot pay the additional tax due, make a copy of the initial payment, and provide a stamped irs approval of a payment plan, which will be added to your liabilities in your application.
This could all take place Monday. Then, if your lender also required amended transcripts, you get everything else perfect, and you wait until the transcripts are received by your lender.
PS: What is this "unavailable" (out of the office until the 6th) of which you speak? Assemble these items and deal with your loan processor or Loan Officer's manager.
So this will cause my loan to be delayed? I can't just omit the w2 which wasn't filed and not use that for approval? If I have to wait on amended transcripts the deal will fall through. We HAVE TO close by February 23rd. Also I work Monday/Tuesday 7am-7pm and my nearest IRS office is a 2 hour drive as well as I'd need to get an appt with a tax professional to amend my taxes for me.
So this will cause my loan to be delayed? I can't just omit the w2 which wasn't filed and not use that for approval? If I have to wait on amended transcripts the deal will fall through. We HAVE TO close by February 23rd. Also I work Monday/Tuesday 7am-7pm and my nearest IRS office is a 2 hour drive as well as I'd need to get an appt with a tax professional to amend my taxes for me.
Call whoever did the taxes for you in the first place. This is an easy and quick fix for an amended return. It shoukd take an hour, then they can email the amended return to you. Or get online TODAY and diwnload tax preparation software and do it yourself.
I'm gonna guess the underighter will spot the gap in employment for those 3 months that this w-2 covers. That will requure an explanation from you. And you're back to your problem.
Pfhtex is a well respected, experienced loan broker. He knows his stuff. Take his advice.
So this will cause my loan to be delayed? I can't just omit the w2 which wasn't filed and not use that for approval? If I have to wait on amended transcripts the deal will fall through. We HAVE TO close by February 23rd. Also I work Monday/Tuesday 7am-7pm and my nearest IRS office is a 2 hour drive as well as I'd need to get an appt with a tax professional to amend my taxes for me.
If you think you are freaking out now, consider closing a mortgage loan while knowingly furnishing income tax returns that are evidence of Tax Evasion. You would be turning an honest mistake into Federal Offenses.
But, honestly, I think you might be experiencing some anxiety, and it's not really warranted. The Tax Transcripts, IF ORDERED MONDAY-TUESDAY after you perfectly execute my advice in my prior post to you, should probably be in by mid-January.
Did your vacationing Loan Officer give you contact information for a Manager or colleague?
Have you received a loan commitment yet? IMO, this is a potential time bomb, but it could also just slink on by. Most UW review the transcripts to see if the tax return shows expenses of other properties, they don't tally the W2s. But they do look at the W2s to verify employment. Whether they cross-check the W2 with return is the difference of working a 12 hour day or a super light schedule and killing time. I know your loan officer caught the missing W2, but did they catch the tax return was incorrect?
What you do not want to do is have your loan officer unilaterally tell you it's okay without checking it out with their UW. While your loan officer is checking things out, you should be doing the same with other lenders. Do not let anyone pull credit until you hear from your loan officer. The problem with not saying anything and waiting to see what happens, it costs you precious time.
Is this a loan where you had to use one of their lenders? Are you putting any money down? Your problem with this scenario, the lender will get this loan, regardless which buyer and it really limits your options. Not every lender handles Fannie REO.
Many (lenders included) are not aware that having transcripts pulled before closing is not a Fannie Mae requirement. You are required to sign a 4506-T, and if it's executed, you must use those transcripts in underwriting https://www.fanniemae.com/content/gu...b3/3.1/06.html These forms were never meant to be routine processing requirements, but to be used as a tool in quality control. The industry did what it does best, and now routinely processes 2 years from the get-go.
I believe your case warrants an UW call to into a Fannie Mae UW (also since they are also the seller). Whether your lender will be motivated to do so, is another matter altogether. The only way this is a deal breaker is if your lender is not willing to work with you, and I doubt that will be the case. You need to discuss this with your loan officer.
I have just drafted up a 1040x and added the missed w2, it shows that I got an overpayment of around $3900 from the IRS as a refund. I have the money saved to pay them back the overpayment. My local tax office is a 2 HR drive and due to my schedule I won't be able to take the amended return in until January 11th. At what point would the transcripts be available do you think if I do this? My lender did not give me a call number for anyone else. We are in the beginning stages of the loan. I received a pre approval on 12/31 and put in an offer. The offer was accepted and I just signed the REO addendums yesterday. Fannie Mae is signing the contract now and sending it to my lender. The contract states a loan commitment date by February 1st, and closing by or before February 23rd in the "time is of the essence" clause. The thing is I can't simply give my lender both w2 and them show income of 30k for the year but transcripts so 13k. That would be a huge red flag as they may think I altered my w2s. Yes I'm freaking out as this is a great buy, and the family would be devastated if I wasn't able to get it through. I also put down $1,000 in earnest money yesterday.
AlsoPfhtex, as far as getting a cashiers check that is near impossible as my bank is a few states over. I can however write a personal check and get copies of it and show where it's pulled from my bank account when it populates the new statement on 2/1. My number one worry is the tax transcripts not being available. My lender is conservative I'm sure as they are a small credit union.
SmartMoney, my loan officer hasn't caught anything yet as I haven't given them any documents yet with the issues. The pre approval was based on only my 2014 w2, 30 days recent pay stubs, and credit report. I believe any lender can do this loan not just my lender. Essentially it is the same as any other house sale aside from the owner is Fannie Mae and the timeline is pushed it seems. I've almost thought of going to a lender that only pulls w2 transcripts. I'm anxiously waiting to call tomorrow and biding my time by seeing what others think of the situation.
How much are you putting down? (That will tell me what options you have).
"My lender did not give me a number to call anyone else." Chances are your loan officer is watching her emails. You may want to send an email. I'm leaning towards telling you to get a back up plan, however, the answer to my first question (down payment) weighs heavily on any advice I give. I'm not certain transcripts to an amended return would be ready in time and why a back up plan may be needed. Get to the IRS ASAP, get returns stamped and payment documentation - there's nothing to lose and everything to gain by doing so. Tomorrow, you can check with the IRS and how long they are taking to process amended return transcripts.
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