Your sale is set to close in two days. The scheduled date is here. Finally, you’ll be able to update your listing to “sold.”
Even more exciting is that the new buyer is all of your own. Their mortgage has been cleared to close for over a week, and after 2 previous attempts, all scheduling issues have been worked out between the parties. Your phone rings with a call from your attorney. You gladly answer this check in call you have grown accustomed to from her.
“What on earth are you talking about!?” you scream in your head as you try to sound calm and collected on the phone.
You just found out that the lender is now asking for your buyers most recent tax return and proof of filing with the IRS.
Has your trusted loan officer lost their mind?
Have you?
After all, you were right there with your buyer all the way through, and you know first hand all this was submitted and CLEARED!
So what happened?
A date on the calendar.
During your buyer’s pre-closing review, underwriting realized it is now one day past the IRS deadline for filing one’s tax return.
Being that your loan has not closed, underwriting is now requiring the most up-to-date filing for all borrowers. All income calculations need to be reevaluated based on the newly filed income.
This may result in an increase in the buyer’s debt ratios, which can increase the closing costs and/or downpayment requirements, or in the most extreme case – a loan declination.
This is a standing guideline that cannot be waived, The file needs to be resubmitted for underwriting clearance. No exceptions.
What happens if your buyer filed for an exception?
Then you would be in luck. Provided your buyer can immediately provide proof of filing for an extension, the file would simply be updated with that proof the extension was filed and proceed as scheduled.
Mark Your Calendar
Although you are the realtor and not the tax professional, it is a good idea to mark the tax deadline dates in your calendar.
Be sure to mark these deadlines on your calendar:
- March 15th (Corporate)
- April (Individual)
- October (Extension)
Push to make sure your closings happen before these dates if at all possible.
Every scenario is unique when it comes to income. If you have a specific question you would like to review, give us a call at: 718-639-9500 or you can schedule a chat with one of our loan officers.