Posted by PegiT_MN on 10/1/13 7:26am
Msg #486566

Government Shutdown Will Cripple Our Business

Not only will there be no FHA or VA loans being processed, the government shutdown will cripple the conventiontional refinance market as well because although the IRS will remain open, they will not be processing any 4506-T requests at this time.

Reply by jba/fl on 10/1/13 8:27am
Msg #486568

Please take this to Just Politics....it belongs there. n/m

Reply by 101livescan on 10/1/13 8:41am
Msg #486572

Re: Please take this to Just Politics....it belongs there.

Well, I have to disagree, Jules. Kinda explains why our business is so stalled and is likely to stay that way for some time. The first email I had in my yahoo account today was announcing the closure.

Time to take a little vacation.

Reply by jba/fl on 10/1/13 8:50am
Msg #486578

Re: Please take this to Just Politics....it belongs there.

I've been on vacation - along with the rest of you.

The government shut down, or threat of due to the unwillingness to work together to do a job that these people were hired (elected - same diff), is just the latest in a series of events to cripple the entire economy....including your individual economies.

This is the can of worms you have opened for today.

Reply by PegiT_MN on 10/1/13 8:53am
Msg #486580

Re: Please take this to Just Politics....it belongs there.

Seriously??? Just Politics may be another place to discuss the government shutdown, but this post definitely belongs in the Discuss Work forum as the 4506-T situation directly impacts our business Julie. Don't be so quick to judge.

Reply by HisHughness on 10/1/13 5:45pm
Msg #486660

Gotta disagreee

Sensitive though I am to using the Work forum as a megaphone for political rants, the poster simply states what she perceives will be the result of the shutdown on our business, without assigning partisan blame. I think it is entirely appropriate here. In support of that, let me note that I could not ascertain her partisan inclination from reading the post.

Reply by Linda_H/FL on 10/1/13 8:41am
Msg #486573

I heard on CNN last night that apps will still be

processed -

As far as 4506T reuqests - people will just have to provide their tax returns for processing and underwriting - what's the problem?

Reply by Claudine Osborne on 10/1/13 8:42am
Msg #486574

Re: I heard on CNN last night that apps will still be

I think this post does belong here!

Reply by snowflake/PA on 10/1/13 8:45am
Msg #486577

Post belongs here. Impacts our livelihood. n/m

Reply by PegiT_MN on 10/1/13 8:56am
Msg #486581

RE 4506-T requests.

That would be great if borrowers could just provide their tax returns for underwriting purposes but due to all the fraud, forgery, doctored tax returns, that is not a possibility.

All loans that go through the underwriting process are required to either have a 4506 or 4506 T request sent into the IRS. A 4506 orders a full tax return and a 4506-T orders a transcript of the tax return.

Without these documents being processed by the IRS, there will be no loans getting through the underwriting process at this time.

Reply by 101livescan on 10/1/13 9:10am
Msg #486586

Re: RE 4506-T requests.

Most of you are not aware that Peggy was a Rock Star underwriter for Wells Fargo, and she knows her stuff.

Reply by bagger on 10/1/13 9:22am
Msg #486588

Re: RE 4506-T requests.

I start with "Are you familiar with the Federal Governments mandated TIL?"
If they say yes, the all is cool, if not I say "well this has nothing to do with your loan, you paid some up front closing costs. If you roll those costs back into the loan, count it as interest, then re-calculate the interest charges over the term of the loan, you come up with this APR or actual cost of the loan. If you found someone that did not charge closing costs, then the APR would be the same as your interest rate. All this form is doing is helping you to shop for a loan".
Never had a problem. And I am not about to pull out a calculator.

Reply by bagger on 10/1/13 9:23am
Msg #486589

Darn, wrong thread- Sorry n/m

Reply by Linda_H/FL on 10/1/13 9:30am
Msg #486592

Believe me - I know Peg knows her stuff...

and I respect her for it - but I'm just repeating what I heard last night - that processing will continue - so IMO that processing needs to continue no matter what it takes....

I live by what my mother always said - "there's more than one way to skin a cat" - and if they can't process 4506T's now, then I guess the burden needs to shift to the people who want the loan - and maybe you can fudge a copy, but instead of a 4506T, follow the requirements of the 4506 - copy of the tax return, all schedules and all attachments - that way the W-2's are included and the income verified.

JMO

Reply by dgd/CA on 10/1/13 9:56am
Msg #486593

Re: RE 4506-T requests.

Yes Pegi, your post absolutely belongs here. Strange how one thought triggers another. When I first started in Residential Lending (1987), the 4506 was just starting to find it's way into the loan package. We called it "the threat/scare form." The reason we did that was because (at that time) there was a $20.00 charge to the Lender from the IRS, and as that impacted their bottom line, most Lenders underwriting staff was instructed to bypass this procedure (of course, the borrower(s) had no idea the procedure wasn't actually performed). It was really only after the IRS introduced the 4506T (no charge) that Lenders started utilizing it in mass form.

I agree with you, it will have an impact on us. However; there is always a "work around" solution somewhere. In the early 90s (when IRS was attempting to convert their operating system from DOS To Anything Compatiable With Java (lol, it took them almost two years [after they incorporated it] to work out the "bugs," as such, Lenders could only pull/retrieve about a third of its' requests), whilst the 4506/4506T was always contained within the loan documents, most Lenders also had an affidavit signed by the borrower(s) stating that the income documentation was true and correct, accompanied by an instruction to the
borrower(s) with regards to "legal remedy." However; prior to instituting this, the "flow" of the loan process was dramatically slowed. At the end of the day, no signing equals no funding, no funding negatively impacts profitability (be that immediate or long term).

In many, many ways, above and beyond your informative post, hoping this issue is short termed.

Reply by Christine/OK on 10/1/13 11:31am
Msg #486612

@ Donna: Like! :D n/m

Reply by sueharke on 10/1/13 5:13pm
Msg #486659

Re: I heard on CNN last night that apps will still be

The BO sends a tax return different from the one filed with the IRS. I have seen this happen several times. What will the bank, lender, or government do if it is determined that the BO gave the lender a tax return different from what was filed with the IRS?

Reply by anotaryinva on 10/1/13 10:06am
Msg #486595

I hadn't thought at this, thanks for posting! I wonder about employment verifications too, doubt they will be processed.

Reply by MW/VA on 10/1/13 10:31am
Msg #486598

IMO these posts are business-related & do belong here.

I'm curious, too. I did a RM signing yesterday that is due to fund on Fri. Will this affect the funding of FHA/VA loans?

Reply by anotaryinva on 10/1/13 10:41am
Msg #486603

Re: IMO these posts are business-related & do belong here.

http://www.cnbc.com/id/101074186 hope that link works

Reply by MW/VA on 10/1/13 10:45am
Msg #486604

Thanks. n/m

Reply by Stephanie Santiago on 10/1/13 1:21pm
Msg #486627

...just thank your conservative brethren.... n/m

Reply by HisHughness on 10/1/13 5:46pm
Msg #486661

Re: ...just thank your conservative brethren....

Now we've crossed the line, and this should be in Just Politics.

Reply by Bear900/CA on 10/1/13 1:30pm
Msg #486629

Agency Contingency Plans

http://www.whitehouse.gov/omb/contingency-plans

Just a sample of Continued and Discontinued Services.

Exceptions are services that will continue, perhaps at a slower pace.

Social Security – non-excepted:
• Requests from third parties for queries

HUD
• No construction draws or construction inspections will be done in the first 10 days of any shutdown and will be re-evaluated as needed for use of intermittent staff.

HUD Exceptions (will continue to operate):
• The Office of Single Family Housing will endorse new loans under current multi-year appropriation authority in order to support the health and stability of the U.S. mortgage market.
• Home Equity Reverse Mortgage Information Tech. (Hermit is their UW system)
• FHA Connection

Internal Revenue Service
(non-excepted activities):
• Information systems functions (except as necessary to prevent loss of data in process and revenue collections)

Banks today are business as usual.

Reply by jba/fl on 10/1/13 1:35pm
Msg #486631

Re: Agency Contingency Plans

Wow, Bear, by putting that last statement in, "Banks today are business as usual." one may get the impression they have been nationalized while we slept and tomorrow they may be closed. What prompted that statement? Because we use "the Fed" to transfer monies?

Reply by Bear900/CA on 10/1/13 1:52pm
Msg #486634

Re: Agency Contingency Plans

I was expecting all sorts of emails today from wholesale lenders mentioning at least <something> about the shutdown. Nada. Was surprising.

I get emails and rate sheets from about a dozen different lenders each day and today was just another day of 'spectacular programs' they are offering.

Will they change their tune tomorrow or the next day if this continues? I'll let you know.

Reply by sueharke on 10/1/13 5:09pm
Msg #486657

I am affected differently as a CPA. The audit I am working on will not be completed until the IRS can work on it again. The good part is that I can work on preparing for the next audit that I know is coming up in case I get a deadline to complete both in too short a time.