Underwriter wants history of IRS payments?!

[Anonymous]

Long time lurker here... I am on a payment plan with the IRS for 2016 & 2017... This plan was established in January-first payment made in February (next one auto drafting next week). This is NOT a judgement or lien. Underwriter came back today stating they need to see 12 months of payments. I emailed my LO and told her I have not made 12 payments, as the plan was recently established. She said "just submit what you have made and it'll be fine..."  I emailed and told her I had only made one payment and the next one is set for next week. I asked if this would be a problem... now it is crickets and I am worried sick. She said their company does not have any overlays, so I am not sure why they need this, when it is not an FHA guidline. Anyone have any insight?

[CreditCuriosity]

I was also worried about this as was FHA although had many years of payments on my installment.  FHA requires this as it counts towards obviously your DTI, but they want to see some history as well on the repayments, but will let the expert mortgage people respond more to this than myself is capable of doing

[VALoanMaster]

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@Anonymous wrote:

Long time lurker here... I am on a payment plan with the IRS for 2016 & 2017... This plan was established in January-first payment made in February (next one auto drafting next week). This is NOT a judgement or lien. Underwriter came back today stating they need to see 12 months of payments. I emailed my LO and told her I have not made 12 payments, as the plan was recently established. She said "just submit what you have made and it'll be fine..."  I emailed and told her I had only made one payment and the next one is set for next week. I asked if this would be a problem... now it is crickets and I am worried sick. She said their company does not have any overlays, so I am not sure why they need this, when it is not an FHA guidline. Anyone have any insight?

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You are correct in that FHA does not require a 12 month payment history for a tax plan. They only require 3 payments for delinquent tax debts so 12 on a now delinquent tax debt is a little much.

One possible reason the u/w asked for this is if you have a thin credit profile, they may want to "add" the IRS as an alternative trade line to bolster your credit profile.

Another possibility is that your file is being manually underwritten.

[Anonymous]

If I got an approval through AUS, would it still be manually underwritten? (This is my first time going through this, so I am very unfamiliar). The LO told me after I went under contract (and wasn't even excited, because I was so nervous of the process)... " It is ok to be excited. The reason why I worked so hard with yuor file and dotted every i and crossed every t prior to issuing your pre-approval, is to make this process smooth. At this point, unless youre hiding something or go buy a new car, anything that pops up in underwriting is completely fixable." So, I am really hoping she was correct in this. I hate this feeeling.

[homeloanexpert]

I deal with all the time. What you're combating is a lender overlay and underwriter discretion. FHA/HUD does not require this. If you're on a installment agreement for unpaid taxes without a Judgment, you only need an installment agreement and (1) month maybe for good measure. If you have a Tax Lien or Judgment you'll need 3 months payments under your belt.

[Anonymous]

The lender told me (back when I first started with her) that they don't have overlays. So, I am guessing it is this particular underwriter? Could this stop me from closing? My stomach is in knots. 

[homeloanexpert]

It's definitely an overlay. I would seriously consider confessing  your LO today. Meaning I would ask them conclusively will their UW require a full 12 months (which obviously you can't) Yes or No? 

I would also suggest you being proactive and contacting another Loan Officer as a back up. Going through a home loan can be stressful even with perfect credit, you need to take this condition off your worry list asap. 

[Anonymous]

When we spoke yesterday, it went like this:

She emailed and said she got my file back from the underwriter. " We just need proof of your IRS payment plan, a new bank statement relfecting earnest money cleared, and then 12 months of IRS payments. Once I recieve these, I can send you off for final review!"

I then called her-

Me: Hey! I got your email, and I don't have 12 months of IRS payments as it is a relatively new plan, we filed an extension last year, etc...is this going to be a problem?

LO: Oh, that's fine! Just submit proof of your extension, as that will likely be needed. 

Fast forward a few hours and I submitted the proof of extension from my CPA and she emailed back "This is perfect! Now, I just need proof of the payment arrangement itself and then proof of whatever payments you have made up to this point."

I submitted proof of the payment plan. Emailed her to let her know it was in the portal. Then explained that I just had the one payment under my belt from Febraury 15th, which relfects on my bank statement. I reminded her it autodrafts my account on the 15th and another payment would be posting this Friday, and I could provide another statement at that time, reflecting that payment posting, if needed. I asked if this would be a problem? (Only having two payments prior to closing)

She hasn't responded yet. My husband is trying to calm my nerves my telling me it was a Friday. She probaby cut out of the office early + she likely had other files or potentially a closing to attend... 

[CreditInspired]

When are you closing?

I thought 3 payments had to be made on an installment agreement to get a mortgage, which cannot be prepaid. If your closing is after April 15, then you should be in a real good place because you would have satisfied the 3 payments. Just another question to ask your UW.