Monday, October 14, 2013

Lenders process applications without IRS

Lenders are processing mortgage applications despite the government shutdown, which has furloughed the IRS income verification process.

Lenders, such as Wells Fargo the nation’s biggest mortgage lender, are telling underwriters to move ahead with mortgage applications without the completed IRS income verification.

Other banks, still recovering from the flood of defaults resulting from the housing bubble burst are wary of borrowers with less-than-thoroughly documented income sources. In some cases, they are requiring a borrower’s 1040, or asking for copies of bank deposits for the month they collected their 2012 tax refund, or copies of the checks sent to the IRS to pay their taxes.

A small percentage of lenders are waiting out the shutdown – deciding that lending without IRS income verification is too risky.

-From CNN Business Watch

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