REMN Wholesale is updating its tax return and tax transcript requirements as the 2013 tax filing deadline approaches. This policy applies to both conventional and government transactions, including manually underwritten loans and to loans currently in the pipeline.
Loans funding on or after April 16, 2014 will require the following:
- Evidence the borrower filed their 2013 tax return, or
- Evidence that an extension has been filed. A copy of the extension is required. Self-employed borrowers will require proof that any taxes due were paid.
As a reminder brokers are responsible for ordering tax transcripts from RealEC®. A link to RealEC® is located on the REMN Wholesale website at www.remnwholesale.com under “Resources”.
NOTE: The 2013 transcript must be ordered and the transcript result showing “No Record Found” is required even when the 2013 income was not used for qualifying
The following chart provides guidance on REMN Wholesale policy.
Income Documentation Used to Qualify the Borrower | Requirement |
Tax Returns – Self-Employed Borrowers | Conventional/FHA/VATax transcripts consistent with the number of years used by the underwriter for loan qualification. If business funds used for qualifying, transcripts for business tax returns are also required. |
DU Finding for Tax Returns (1 or 2 years) |
Evidence the borrower has filed their tax return. If recently filed and the TRV is not available, refer to Sections 2 & 3 on page 2 for policy. |
DU Findings require 1 or 2 years W-2s(No tax returns to qualify) |
|
Un-reimbursed Business Expenses | Two (2) year’s 1040s and tax transcripts required |
2013 YTD P&L Requirement | FHA transactions require an un-audited P&L if required if more than one calendar quarter has passed since the last tax filing. |
When the tax transcripts differ from the tax documentation provided the following applies:
|
Situation |
Policy |
1. | Transcript shows no record because the borrower did not file a tax return and the borrower is required to file. | File is not eligible. |
2. | Transcript shows no record because the borrower recently filed their 2013 return but the borrower was not qualified using the 2013 returns.(i.e. borrower filed their 2013 tax return but borrower was qualified using income from their 2012 and/or 2011 return) | Copy of the 2013 filed tax return is required and the 2013 transcript must indicate “No Record Found”.NOTE: The tax transcripts for 2012 and/or 2011 will be required depending on which tax returns were used to qualify.Additionally:
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3. | Transcript shows no record because the borrower has recently filed their 2013 return and the borrower was qualified using income from the 2013 tax return.(i.e. borrower filed 2013 tax return and income from the 2013 tax return was used to qualify) | Copy of the 2013 filed tax return is required.
NOTE: Tax transcripts take approximately 6-8 weeks to become available. If the return was filed within 6-8 weeks, an exception to fund without the return may be granted by management. Documentation required to request an exception:
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4. | Transcript shows no record for 2013 because the borrower is on extension (generally extensions expire at the end of October for the current tax reporting year)(i.e. 2013 tax return has not been filed; only the extension for 2013) |
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5. | Borrower was qualified using W-2’s |
|
Situation |
Policy |
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6. | Transcript reflects a discrepancy because the borrower has filed an amended return and the loan qualifies on the lowest income (original or amended return). |
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7. | Transcript reflects a discrepancy because the borrower has filed an amended return and the loan qualifies with the highest income (original or amended return) |
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If you have any questions, please contact your Account Executive.