IRS breach potentially delaying real estate transactions

iStock-000017972256XSmallEarlier this week, it was revealed that over 100,000 tax payers may have had their personal information stolen from the IRS. This data breach is potentially causing hiccups with real estate transactions currently in process too.

With every mortgage, a borrowers income is verified with tax transcripts from the IRS. The tax transcripts are compared to other income documentation that is provided to the mortgage company as a step to prevent fraud. During busy tax times, it may take weeks to obtain the tax transcripts and it’s not unusual to have transcripts to come back as “rejected” if the borrowers information submitted to the IRS does not match their filed tax returns (this is one reason why lenders bug you for your tax returns).

With this recent data breach, the IRS is rejecting some request in order to deter fraud. Lenders may receive a response from the IRS that states:

“Due to limitations, the IRS is unable to process this request. The IRS will mail a notification to the borrower to explain the reason; please contact your borrower.”

Ellie Mae reports that they’re seeing about 2-3% of request for tax transcripts receiving this “limitations rejection”.  Because of the data breach, no third parties will be allowed to have access to an impacted borrowers information.

However, if you or your clients receive this rejection, waiting for the IRS to mail a notification may obviously cause delays to a real estate transaction. Lenders will require acceptable transcripts and waiting on the IRS, U.S. Mail and the borrower may be an issue for on time closings for those impacted by the IRS data breach.

This may not only impact closing dates… it may also cause locks to expire if the mortgage rate lock is set to expire prior to the lender receiving an acceptable tax transcript.

What a mess!

What May Impact Mortgage Rates this Week: May 26, 2015

mortgageporter-economyThis is a short week, thanks to the Memorial Day weekend. Mortgage rates continue to be volatile following the Fed’s commentary that they may start hiking rates soon. Remember, the Fed does not directly control mortgage rates – the Fed does control the Fed funds rate. Mortgage rates react to the Fed’s actions as mortgage rates are based on bonds (mortgage backed securities) and are bought and sold, like stocks. Speaking of stocks, yesterday the Dow had it’s biggest loss in three weeks closing down 190 points.

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Do you own a rental property in Seattle? Read this!

Seattle_RRIOIf you own rental property located in Seattle, you need to be aware of fairly new requirements, created by the Seattle City Council, to register your investment property. This city ordinance, the Rental Registration and Inspection Ordinance (RRIO) impacts landlords and property managers who have multiple units to those who have just one rental home. There are some exceptions, check the ordinance for more information.

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HomeStyle Mortgage is now available at Mortgage Master Service Corporation

mortgageporterhouseThe HomeStyle mortgage is Fannie Mae’s version of an FHA 203k rehab mortgage. Fannie Mae HomeStyle allows home buyers to finance improvements and/or repairs with their purchase or with a refinance. This allows home owners to have just one mortgage payment while enjoying upgrades made to their home.

Just like a 203k loan, HomeStyle requires that you work with a consultant to determine what repairs will be required and help advise on improvements. If you’re buying a home and using HomeStyle for your financing, the consultant’s report may also serve as your home inspector.

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What May Impact Mortgage Rates this Week: May 18, 2015

mortgageporter-economyMortgage rates have been seen more volatility over the last few weeks than what we’ve experienced in quite a while. Mortgage rates have been trying to trend higher.

Here are some of the economic indicators that are scheduled to be released this week:

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Want to stop your rent from increasing? Buy a home.

It’s no secret that rents, along with home prices, in the greater Seattle area have been trending higher. Rent Jungle reports that as of March 2015, the average rent for a 2 bedroom apartment within a 10 mile radius of Seattle is $1907. This is up 4% in the last six months.

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HARP extended through 2016

MortgagePorter-HARP2Earlier this week, Director of the FHFA, Mel Watts announced that HARP (the Home Affordable Refinance Program) will be extended for one more year. From his prepared remarks:

“The HARP program allows borrowers, including those who are underwater on their mortgage and who are regularly making their mortgage payments, to refinance their loans to take advantage of historically low interest rates.

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What May Impact Mortgage Rates this Week: May 11, 2015

167522_1671562643181_1660852568_1649993_5021016_nI hope all you Mom’s had a wonderful Mother’s Day yesterday. I was lucky to be able to spend all day Saturday with my mom, who helped me during the West Seattle Community Garage Sale and to have lunch with her and my family on Sunday. My son and hubby made me a delish dinner last night… I can’t think of a better Mother’s Day. :)  This photo is a pic of my mom with her daughters at Disneyland.

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