2014 tax transcript requirement & Increase of IRS rejection

Posted by admin on June 04, 2015

2014 Requirement


2014 Tax Transcript Requirement

Effective with loans closed on or after June 15, 2015, 2014 tax transcripts will be required, unless the file contains evidence an extension was filed along with a copy of the IRS notice for 2014 showing “no record of return filed.”

Note: Loans not requiring income such as non-credit qualifying FHA Streamlines and VA IRRRLs do not require tax transcripts


IRS Rejection of Tax Transcripts

Essex is aware of an increase in the IRS rejection rate of tax transcript requests due to suspected identity theft or other concerns. While tax transcripts remain a requirement on all credit-qualifying products, we also acknowledge that when tax transcripts are not available, there are additional ways to assess the credibility of the income documentation. Essex will consider these instances and will not require an exception as long as all of the following documentation is included in the file:


* Evidence the IRS has rejected the 4506-T as “unprocessable” or “limitation” or with another similar codeand not a “no record found” or data          mismatch response, and

* Bank statement or copy of check evidence tax payment made or refund received for that year matches the 1040 amount, and

* Signed 4506-T for that year(s).


In addition, the underwriters will use their discretion when assessing income credibility & may require additional information (including, but not limited to: prior year transcripts, VOIE’s bank statements supporting payroll deposits, etc.)


6/4/15 Should you have any additional questions, please contact your department manager.

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