Carrington Wholesale Lending

4506T Requirements Updated

The Carrington Mortgage Services, LLC (CMS) policy regarding 4506T requirements has been updated, effective with loan approvals on and after May 12, 2014.

Loans Approved by Underwriting between April 15, 2014 and June 15, 2014:

  • If tax returns are filed, 2013 and 2012 validated tax transcripts are required, including “record of account”
  • If recent filing within 6-8 weeks, 2013 tax transcript showing “No record of return filed” plus 2012 and 2011 validated tax transcripts, including “record of account”
  • Self-employed borrowers using 2013 income require 2013 and 2012 validated tax transcripts, including “record of account”
    • Conventional – no exceptions
    • Government – if variance in income has increased less than 10% from prior year, 2013 self-employment income can be considered in qualifying ratios
  • If extension filed, see below requirements

Loans Approved by Underwriting after June 15, 2014:

  • If tax returns are filed, 2013 and 2012 validated tax transcripts are required, which must include “record of account”
  • If extension filed, see below requirements

If a Borrower has filed an Extension:

  • Copy of the extension filing
  • If funds owed on extension, proof of payment required
  • 2013 tax transcript showing “No record of return filed”
  • 2012 and 2011 validated tax transcripts including “record of account”

If a Borrower is on a repayment plan:

  • Copy of IRS application/ repayment plan agreement
  • Proof of all payments made within the month due since 1st date of payment due
  • Monthly payment must be included in DTI ratio

W2 Transcripts:

  • Required if wages on 1040’s do not add up to the W2s in the credit package
  • Only if wages on the 1040 are less than W2. If 1040 wages are more than W2’s, acceptable as long as only W2 wages are being used for qualifying
  • Required if using higher W2 wages than prior year and 2013 1040 transcripts are not available
  • If W2 transcripts are unavailable until mid-June, QC will validate the W2 with the employer if required for qualifying
  • Underwriter discretion for other circumstances

Amended Tax Returns

  • Copy of the original 1040 filed
  • Copy of the 1040X and the amended 1040
  • 4506t validated tax transcripts for both returns, including “record of account”
  • CMS does not accept amended tax returns for qualifying purposes
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