4605-T QUESTION

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Latest post 04-17-2008 9:08 PM by Ray in Florida. 18 replies.
  • 04-16-2008 12:55 PM

    4605-T QUESTION

    We are trying to close on the purchase of our new home on Friday (two days from now), and are being held up by the lenders request to the IRS for transcripts of our previous years returns, which is all well and good (I suppose) ... but it's now been 5 business days since the request was initiated, and our lending agent can't get an answer as to where the lender (not his agency) is with the 4506-T process.

    This closing is time-critical, as we will be closing on the sale of our current residence Friday morning, and the moving truck is arriving on Saturday.

    Is it possible to still close, even if it's late on Friday, in light of the delay on the lender's part regarding the processing of this 4506-T request?

    We had supplied the lender with copies of the previous three (3) years returns during the application process, and there has been no attempt to defraud on our part ... all of our income is varifiable, there are no "unusual" aspects of any of our returns, etc.

    We thought that, with this being an electronic process, we would have had an answer by now ... and we're getting extremely anxious as to what we're going to do come Saturday. The closing on the sale of our house cannot be delayed.

    Any advice would be greatly appreciated.
  • 04-16-2008 1:11 PM In reply to

    re: 4605-T QUESTION

    Not sure what you mean by "lending agent" -- mortgage broker?? I sure hope you aren't referring to your realtor. Is there a reason you aren't communicating directly with the lender at this point?

    "Is it possible to still close, even if it's late on Friday...."

    You're asking us?? Seems to me that you'd need to ask the buyers and the title/settlement company folks.

    I'd be concerned that you're so close to closing and your lender is still doing due diligence on *you* vs., say, on the title issues related to the property.

    "... and we're getting extremely anxious as to what we're going to do come Saturday."

    Personally, I'd have my stuff stay on the truck(s) and stay in a hotel/extended stay place.

    While the closing on your current home can't be delayed, you don't say whether you've talked with the buyers about renting back on a daily basis.
  • 04-16-2008 1:22 PM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,303

    re: 4605-T QUESTION

    Laymans take:

    My read is that there are a couple of services that electronically process 406-Ts in 24/48 hours for a fee of course and that such is common place.
    (Lots of lenders like to confirm tax returns of late--so that part is not odd)

    The more pressing questions are who has the duty to get it processed timely and who has the problems if it doesn't get done.

    My guess is the fine print of your lending agreement, says no matter who drops the ball, if the lender isn't happy and lender pulls the plug then the lender is not to blame. Now whether your purchase agreement locks in the same fine print is problematic--if there is a finance clause its likley in there somehow--but if its not and you show up at closiny w/o good funds are you in default of the deal and can seller walk and keep your deposit?

    EG is your deal a on or before date and this is last date--you better know how to get an extension.

    Its not clear if lender is merely a bit messed up or if lender is into playing games so as to "force" you to eat a higher rate.

    Right now I'd not be taking anybodys word for gospel and I'd not assume closing will take place Friday and I'd NOT assume anybody is really there to watch out for my interests.


    As a layman you may not know what your fine print says and what are the legal limits vs the practical limits of options you may have at the 11th hour--so before you walk into closing w/o funds or pull the plug or sign any changes you might be wise to have solid legal counsel on your side--even if its 11.59.



  • 04-16-2008 1:38 PM In reply to

    re: 4605-T QUESTION

    We are purchasing a condo unit from the developer of a gated community near us ... there will be daily penalty incurred if we are not able to close on the 18th.

    Only if we pull out of the purchase all together will we lose our $5,000.00 dollar deposit.

    Our "agent" is the Mortgage Broker, and has been beating his brains out trying to get this resolved in as timely a manner as he can, but the lender and the underwriter are not being very forthcoming with information at the present time.

    They have been made aware of the severity of our situation, the penalties if we don't close on Friday, and the time-sensitive nature of our situation, but nothing seems to motivate them to "get things moving".

    It was suggested by our contact that, since we're renting a truck and doing the move ourselves, we could negotiate with the truck rental company to extend the rental period beyond just one day (Saturday), and perhaps find a hotel to stay at for a few days.

    But the frustration that we are feeling over the total ambivalence of the folks at the lending end of the process is beyond words.
  • 04-16-2008 2:02 PM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,303

    re: 4605-T QUESTION

    Not necessarily hopeless---many a financing contingency clause is subordinated to the lenders fine print when you get you mortgage committment and send same to seller that you have financing in place. If the lender (NOT you!) pulls the plug it may trigger that you can walk w/o losing your deposit . This is a quite common issue of the fine print in my area and it may apply in your area---but nobody is going to tell you about same unless its to thier benefit to do so.

    If you are in an area of FL where values have taken a bath your seller may be most anxious to bend a bit or even twist some arms on your behalf for you NOT to trigger a walkaway due to lender pullout clause---but I think you need a firm understanding of if/how that works under your set of fine print --the lending agent may or may not be in a position to help sort same out--afterall he stands to lose his commission if the lender balks and you walk--but I'd NOT rely upon hte lending agent for the final legal work--odds are everyone will gang up on you and tell you what you must do--under penality of YYY and XXX---and if you lack a iron nerve you may need to rent one in form of good local counsel not conflicted out by other deals with said developper or lenders etc.

    You may lose 99.9% of your leverage to fix things if you close unless you know how to legally preserve the issues still you want held open (Its called the doctrine of merger) --and even if preserved you may lose 80% of your leverage. .



  • 04-16-2008 2:11 PM In reply to

    re: 4605-T QUESTION

    We live in the Lee County area ... Cape Coral.

    We were able to get the Developer to come down on their asking price by $13,000.00 dollars when we agreed to the purchase.

    We have approached the contact we have with the Developer about the possibility of at least letting us place our things in the garage of the unit, but not occupy the unit until closing ... and were declined.

    Due to family constraints, this is the only weekend we will have some of our family members for help with the move.

    We are hoping that, once the loan has been "cleared for closing" by the lender, things can be expedited rapidly.

    We will see.
  • 04-16-2008 4:41 PM In reply to

    re: 4605-T QUESTION

    I'm not sure where you got the idea that the 4605-T processing was electronic.

    What I read on the IRS website is that (even if you fax the request) the transcripts get mailed and takes 10 days to 2 weeks.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 04-16-2008 7:34 PM In reply to

    Agree [=|=] re: 4605-T QUESTION

    I was just about to say the same thing. The IRS says "most" requests are processed within 10 days, but you still have to allow time for the mail to reach you or the lender. I'd say you have @3 weeks from the time the request was made.
  • 04-16-2008 9:44 PM In reply to

    re: 4605-T QUESTION

    We have been told, by multiple sources, that the transcript requests are handled electronically now, and take up to 48 hours (2 business days) to be processed.
  • 04-17-2008 12:17 AM In reply to

    re: 4605-T QUESTION

    Multiple sources?

    Have any of those sources been at the IRS.

    If not, I suggest you call up the IRS and ask.

    I was able to get an EIN online at the IRS website in a matter of minutes so I'm no stranger to figuring out how to do that if it's available.

    That's what a looked for on the IRS website after reading your post and couldn't find anything that would allow the transcripts electonically.

    Yes, you can download and print out the form, but you still have to fax it or mail it.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 04-17-2008 8:24 AM In reply to

    re: 4605-T QUESTION

    Apparently, as I'm being told, there are now services out there that lenders use that have access electronically to the main IRS Data Centers, and are able to get the required information in 1-2 business days ... at least that's what these services are advertising.

    If it's bogus, then I'm going to be very angryn at a number of people, who have made representations to me that this is "no big deal" and "you'll be able to close on time". If this is not the case, then someone in the process should be liable for the penalty we will incur from the Developer for not being able to close on Friday (tomorrow), the food that will go bad because we have no place to put anything, the cost of renting a storage room large enough to store basically our entire house full of stuff, etc.

    Now I'm getting mad ...
  • 04-17-2008 10:23 AM In reply to

    Feedback [*=*] Nobody outside IRS has electronic access to the transcripts

    “Apparently, as I'm being told, there are now services out there that lenders use that have access electronically to the main IRS Data Centers, and are able to get the required information in 1-2 business days ... at least that's what these services are advertising.”

    I am a tax attorney. That’s not correct. No private firm has access to the IRS computers that store account information. As a result, there is no private service out there that can go into the IRS computer and get this information for the lender (or for you).

    The transcripts for the last 3-5 years of tax returns are generally available on the IRS computer system and can be printed out by IRS employees with proper access to that system in a matter of a few minutes. However, when you mail a Form 4506-T to a service center for this information, it gets worked in the order received and there are a variety of requests that the IRS handles, not just transcript requests. As a result, it can take up to 2-3 weeks to get it, particularly around filing season, which just ended on Tuesday.

    The transcripts can be obtained faster by going to a local IRS office and waiting for an IRS taxpayer rep to pull the information. There are probably services that lenders can use that will send someone to an IRS office to get that information if the lender does not want to do it itself. I suspect that is what these services that are advertising are doing. Once again, NOBODY outside the IRS had direct access to the IRS computer system containing account information and thus no service can simply get IRS transcript information via their own computer.
  • 04-17-2008 10:39 AM In reply to

    Agree [=|=] re: 4605-T QUESTION

    "The transcripts can be obtained faster by going to a local IRS office and waiting for an IRS taxpayer rep to pull the information."

    Then I suggest that you, the borrower, pay a visit to your local IRS office and get your transcripts on the spot and turn them over to you lender's rep. (Keeping copies for yourself, of course.)



    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 04-17-2008 11:08 AM In reply to

    re: Nobody outside IRS has electronic access to the transcripts

    This is the response that our mortgage broker got from the lender this morning ...

    All I can tell you is that over the years we processed the 4506 by faxing it and we received a return fax from them. Maybe it is a special site we lenders use. Sometimes it took 24 hours and some time it took 72 hrs. The only thing that is new is now we are ordering them on a more regular basis. So will the IRS be overloaded with requests and will the turn time change? This I cannot answer.
  • 04-17-2008 11:19 AM In reply to

    re: 4605-T QUESTION

    I sent electronic copies of our W2's (Adobe pdf and image (tif) files) for the previous three (3) years ('04, '05 & '06) to our mortgage broker this morning ... he sent them on up the food chain to the necessary people. Maybe this will re-start the process.
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