I knew it was too good to be true

[Anonymous]

I am so livid right now I could just scream. I need to figure out how to calm down enough to work and I have no clue how I'll make it through the weekend.

When we started this loan process a few months back, I was straight up with the loan guy. I said, "I owe the IRS $x and I pay them $x a month. I haven't missed a payment in over 3 years and I'm also paying my quarterly as we go. Will this be an issue?" He replied that he didn't forsee any problem since I did not have a lien against my name. I'm supposed to close on June 24th or so and the UW got all the docs last Thursday or so. Today he calls and says she wants proof that 2007 and 2008 taxes have been paid, which they haven't. I'm planning to do an OIC after the move so I can just work on paying my quarterly and get ahead finally. They also didn't get my 2008 return from the IRS, I'm not sure why, so I had to send that to them.

The UW's husband is going through chemo and she's now out of the office so I get to sit here freaking out all weekend about how long it's going to take, what she's going to say and what's going to happen now. He said if we add the monthly payment for the full amount to the DTI, it puts me I think at 51 or 52% so supposedly he got his boss to get her to agree to it if the 8k credit goes toward the back portion. I was under the impression that if you owed, the 8k went toward the amount anyway, so I don't even care about that. I just want this house and I don't want to go another 3 days without knowing what's going to happen.

I'm just sick. Any encouragement? In my two prior mortgages, I owed the IRS some and this was never an issue. I realize the market and economy are different, but even the loan officer said that he hadn't ever seen this before. Can anyone provide words of wisdom or anything that will help?

I can start over if needed, but I don't know if this will keep coming up.

Thanks,

Karen

[Anonymous]

Its called Pay to Play

I am convinced that its government that has forced the banks to only accept tax returns and make sure they are paid.. There is no reason that a bank could not accept CPA audited financials as proof of income other then government pressure. What makes Tax returns so valid especially for a business owner because I'm going to write off everything I can and take all the deprecation I can? However, my true income is much higher then whats reported to the IRS, but I cant get a loan in the amount I want.

[Anonymous]

Banks are looking for the simple fact that if you were responsible enough to pay your taxes....your responsible enough to pay your house payment....easy as that....

[Anonymous]

BS...90% of the people have there paycheck robbed by the IRS before they get it...The only reason they file at the end of the year is for their refund..So its has nothing to due with responsible enough to pay taxes since its deducted before you even see your paycheck

[llecs]

And then there are some of us who skip the deductions on our W-4s and ask that a lowballed $x amount be deducted every payday vs. a calculation based on the tax tables. I'd rather owe $5000 than get a refund of $5000.

Message Edited by llecs on 06-14-2009 10:15 AM

[Anonymous]

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@llecs wrote:
And then there are some of us who skip the deductions on our W-4s...

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Indeed, the W-4 calculations are skewed to favor the IRS. What the feds try hard not to tell you is that each of us is legally entitled to claim however many exemptions it takes to get our withholding down to 90% of the year's tax bill (if you withhold less than 90%, you're subject to penalty). Money withheld above your tax liability is an interest-free loan to the government, which they will pay back only once you've asked for it by filing a return. Most of us could invest the money better ourselves. My goal annually is to write the treasury a check for less than $200. I come pretty close most years. Ideally, I'd have to write them a check for less than the cost of processing it -- THAT would be just revenge! Last year -- when it seemed I'd likely claim the then-$7,500 tax credit/loan for first-time buyers -- I banked several thousand dollars in down payment by adjusting my withholding accordingly. When it turned out to be a non-repayable $8,000, I wound up getting a refund greater than my closing costs, even accounting for the nearly $1,000 I'd under-withheld deliberately (the rest of those thousands were what the feds would have owed me as a refund)!

[Anonymous]

What I don't understand is that I have been paying my taxes. I have been responsible. I pay the IRS what I can quarterly and make arrangements to pay whatever is left each year. It would be different to me if I owed for years and never made a payment. I'm constantly in contact with the IRS making sure I stay on top of my payment plan etc. I have not missed a payment or been in default since 2003 or 2004. That's over 6 years. In the whole time, there has never been a lien against my name either or a levy to my bank account. I know you don't mess with the IRS. I also have claimed every cent that goes into my bank account from the company I work for, which is my only source of income also. It's not like I say I make 30K but have another 10 or whatever in cash, or even that I have unrealistic deductions. I've played by the rules and don't know what to do now.

I get that the economy is bad and jobs are uncertain. I get that banks made bad choices in the past. The 8k credit will go toward my debt with the IRS. I'm fine with that. I just want to be able to pay them off so I can pay them as I go and remain current. I need to buy a house to help with home office deductions and the interest deductions.

My mortgage payment will be very similar to my rent payment that I've paid on time every month since June of 06. I am nowhere near as bad a risk as I was when I bought my condo back in 2003 or my house back in 2004. (my credit score was between 540-580 then, whatever the minimum was. Don't remember.) Now my score is almost 700. I get that the market and environment are different than they were, but even back then I was never late on a payment either. I don't get why one bad mark can possibly screw up everything when my file is great in every other area.

Yeah, I'm not in a good mood. I haven't slept much or been able to work. At this point, I don't trust much of what my lender said. He said his boss is trying to push it through, the UW owes him a favor, but I won't believe anything until I get the keys and I'm really annoyed that he told me back in Feb that this wouldn't be an issue.

I accept responsibility for my debt, which I think I said before (trying to prevent flames,) and it's had to be more last year and the year before because I was trying to take as few deductions as possible to be able to have income to qualify. I'm just furious that my loan officer gave me misinformation and I might lose my dream now. I'm counting the hours until 9-10 am tomorrow morning so I can figure out what's going on. Any good thoughts would be appreciated.

[Anonymous]

Karen:

Keep your head up I'm sure it will work out in your favor.  Praying for you. 

[Anonymous]

Ty so much. I'm determined to do what I can to make this happen and I'm hoping the mortgage guy will do what he said. I'm trying to stay calm but it's hard

[musikklvr]

It seems they look for ways to keep people from getting a mortgage. I hope things work out for you so you can get your home.