The IRS has announced a temporary suspension of their Income Verification Express Service (IVES) due to their COVID-19 procedures. IVES is used by mortgage vendors to obtain IRS transcripts. It appears that orders placed on and prior to March 26, 2020 will continue to be processed by the IRS, albeit with significant delays, and it is unclear when orders placed on and after March 27, 2020 will be processed.
During this time, Carrington Mortgage Services, LLC (CMS) will follow our Government shutdown policy for all loan products with the exception of Non-Agency.
Internal Revenue Service (IRS)
In the event a shutdown impacts the IRS issuing tax return transcripts the following guidance is applicable:
Refer to the product specific underwriting guidelines for detailed requirements.
As a reminder, CMS has the following policies related to IRS transcripts:
As a reminder, CMS is not currently accepting new submissions or locks of non-agency loans.
For existing locked loans, the following products require verification of all full doc and 1-year alt doc income types using IRS transcripts:
IRS transcripts are not required for Carrington Investor Advantage and borrowers qualified using 12- or 24-months bank statements.
FHA, VA, Fannie Mae & Freddie Mac
CMS does not require IRS transcripts to validate income for FHA, VA, Fannie Mae, or Freddie Mac loans.
Underwriters may request IRS transcripts under circumstances such verifying recently-filed tax returns used for qualifying, the filing of amended tax returns, or when inconsistencies are revealed with income documentation during the underwriting process. The following may be used as alternatives:
To evidence 2019 returns are filed:
To verify amended returns:
When inconsistencies are revealed during the underwriting process, Underwriting Supervisors and Managers will continue to use the “Request Suspicious Activity Review” function in Encompass so that QC may review on a case-by-case basis.
The following resources and FAQ provided by the IRS may be helpful for borrowers when borrower-provided transcripts are requested to verify current tax return and amended tax return filings: https://www.irs.gov/individuals/get-transcript-faqs
Q9. How long must I wait before a transcript is available for my current year tax return?
If you filed your tax return electronically, IRS's return processing takes from 2 to 4 weeks before a transcript becomes available. If you mailed your tax return, it takes about 6 weeks. If you didn’t pay all the tax you owe, your transcript may not be available until mid-May or a week after you pay the full amount owed. Refer to transcript availability for more information.
Once your transcript is available, you may use Get Transcript Online, you may order a tax return transcript and/or a tax account transcript using Get Transcript by Mail or call 800-908-9946. Please allow 5 to 10 calendar days for delivery. You may also request any transcript type listed below by faxing/mailing Form 4506-T, Request for Transcript of Tax Return as instructed on the form. The time frame for delivery is the same for all available tax years.
Please contact CorrespondentRM@carringtonms.com with any questions.
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