Another Tax Transcript Question

[Anonymous]

Hello, our loan is registered and yesterday we got all our disclosures (one set from lender Mb Bank, and another set from our broker).

Of course there were some additional documents I had to fill out, including a request 4506-t.  I hanks to this forum, I knew what the form was.  Anyway, I'd previously supplied tax returns for 2013 and 2104, and was told only proof of filing for an extension on 2015 would be ok.

On the 4506-t form, the broker requested the return transcript for 13/14, account transcripts for those years, and W2/ 1099 transcripts.  I feel like this is overkill, and only the returns should be needed to verify into come, but ok........I'm an ordinary W2 employee with full W2s available for all three years.

my my concern is that in 2013 my refund was offset for state tax liabilities owed for prior years.  I assume the transcript will show the offset and to whom it was paid?  If this offset will kill the loan, I'd like to know now so I can save my money for appraisal, etc.  Will UW care about refund offsets?  Or are they truly just concerned with verifying income?  Should I push back and only authorize release of the returns themselves?

this is a Freddie conventional loan.  I did some research, and here is irs guidance to lenders re: Fannie/ Freddie guidelines re: use of the 4506 form:

Fannie Mae

Lenders must "obtain a completed and signed Form 4506-T from all borrowers at both application and closing…on all applications dated on or after September 1, 2009."
4506-T transcripts should be "used to validate the income documentation provided by the borrower and used during the underwriting process." (Fannie Mae Announcement 09-19)
Freddie Mac

Sellers must "obtain a signed IRS Form 4506-T for all Borrowers, whose income is used to qualify, on both the application date and on the Note Date...
Effective for Mortgages with application dates on or after February 15, 2010 and Settlement Dates on or after April 1, 2010." (See Freddie Mac Bulletin 2009-27)

It it appears that under Freddie, the lender need only have the form to verify income, so maybe the returns only? 

Thanks in advance.

[Anonymous]

It shouldn't be a problem.  Lenders have to get transcripts everytime.  All they are needing them for is to verify the tax returns you gave them match the records the IRS has.  As far as the W2/1099 boxes that were checked they will only order those if they need them.  Since you gave them your W2s they probably won't order them.  The lender is probably just being on the safe side so they don't have to get you to fill out another 4506 if they need to order W2s or 1099s.  

[Anonymous]

Thanks for the reply.   I'm just (understandably) super worried about UW combing the tax transcript, and digging up many cans of worms about old state tax debts.

If anyone else has had UW come back with questions about tax offsets based on tax transcripts, do chime in! 

[Anonymous]

Is the debt fully paid?  If it was a state tax lien it most likely showed up on your credit report and it will show if it has been released.  If it's paid in full then there shouldn't be a problem.

[Anonymous]

Yes, its paid.   So I do have that...no tax lein.

[Anonymous]

No worries then.  They aren't using your tax refund as income anyways so they shouldn't care that it was offset that one year.  As long as the lienis paid you are good.  If it's not showing on your credit report that it is paid your LO would have mentioned it to you.  Even if it shows unpaid it's an easy fix.  You just get the realese from the courthouse that shows it's paid.  I have done that for several of my customers.