Question by Eric L: What is the 4506-T for in regards to a mortgage refinance?
I am a loan officer for a mortgage company refinancing one of my clients. He is stating his income as he is self-employed. One of the conditions required by the lender is a 4506-T tax form. I forwarded it to my client, but he is hesitant to submit this form in fears of being audited by the IRS? What is the likelyhood of this actually happening and what would need to happen for the IRS to take such drastic measures? Otherwise I’m not sure why this is a requirement from the lender…
Of course I haven’t been a loan officer for very long…if I had been in the industry for many years, I doubt I would be coming to Yahoo Answers to obtain smarmy replies from know-it-alls. But hey, you were all in the same boat at one point in your careers, right?
Answer by bostonianinmo
Guess you haven’t been in mortgage banking for very long, have you? That is to release a transcript of the borrower’s tax return(s) for the years in question. The lender is requiring some proof of income; it is not a stated income, i.e. no-doc loan.
It does not trigger an audit, it’s just for release of the tax return information to the lender for verification.
Add your own answer in the comments!