Chase, Wells Loosen IRS Transcript Policies
Major lenders are relaxing their policies with respect to buying
loans from their correspondent lenders during the government shutdown.
The shutdown has created
problems for lenders because the Internal Revenue Service has stopped
processing 4506-T forms, which are used to verify the borrower’s income and
other tax information.
Wells Fargo Home Mortgage and
Chase Home Mortgage originally informed lenders they would not accept loans
that didn’t include an IRS-processed 4506-T form in the loan file.
A Wells Fargo spokesman said
according to new guidance, the nation’s largest lender has waived the
processing requirement. However, loan officers must get the borrower to sign
the IRS 4506-T form so it can be processed when the government shutdown ends.
Mortgage Network executive vice
president Brian Koss said Wells Fargoloosened it guidance. “They are
giving lenders a little more flexibility on the IRS 4506-T form,” he said.
Chase is also loosening its
policy with regard to IRS 4506-Ts, according to bank officials. Retroactive to
Oct. 1, Chase will buy loans from its correspondent lenders without an IRS
transcript. On a temporary basis, the giant bank will only require a 4506-T
form that has been signed by the borrower.
Lenders rely on IRS transcripts
to protect themselves from the buyback risk. So the primary lenders are the
ones that take the buyback risk when they sell a loan that doesn’t have an
IRS-processed 4506-T form.
Scott Larson
Reverse Mortgage
Specialist
(408) 315-2503 direct
(408) 872-4002 fax
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