Lender requesting a ton of docs

4 Replies

I'm in the process of doing cash out refi's on 2 rental properties. One is with a portfolio lender, the other is with a Fannie Mae lender. I applied with both using only my W2 income which is sufficient to support the debt to income ratios. In addition to my tax returns, the banks want the tax returns for every company where I receive a K-1 even though I didn't base the loan app on this info. I have other entities with several other partners. I'd prefer not to provide all of these returns. Any thoughts on how to handle this? Thanks, Michael

@Michael Davidov

I'm not sure about the portfolio lender, since you have doing the other loan with a company that will sell the loan to Fannie Mae you're going to need to provide your entire tax return including all schedules.  

Now the K - 1 you receive is that 1099 income from another company or 1099 income from one of your companies?

If it's a company that just pays you just provide K - 1's and the 1099 at the end of the last 2 years and you're golden.  

If you own the company you'll need to provide the 1065's if it's a partnership or 1120's if it's an LLC. They will also want to your K-1 and 1099 if it's applicable.

Sorry but that's what it is if you want Fannie or Freddie's money these days Sir.

I hope this helps.  

Shaun Weeks I am ok with giving them the k-1 for each company but they want the returns for each and every company I have a 5%+ interest in. That seems a bit much. Thoughts?

@Michael Davidov

Unfortunately since you own part of the company it will show either on a statement section of you 1040's or under the section where it shows how many EIN numbers or Tax ID numbers you have.

Plus all the income you document is on page 1 of the 1040's and ALL these amounts have to be accounted for. No exceptions and even you don't need the income the uw needs to fill in the blanks.

I would probably ask for the same thing so that I know your income is calculated correctly. When it comes to 1040's you need to give everything because when the bank orders a 4506 T ( IRS tax transcripts to make sure your 1040's aren’t fake ) if it's off the UW won't move forward and approve it unless it's an IRS error.

In regards to bank statements, 401K, IRA's, etc. You don't have to give everything. I would just give enough to show the required amount of reserves and maybe a little more to help with a DU or LP approval.

Honestly I know it's a lot of work but it sounds like you're in good hands. Most Loan Officers ask for these things 3 or 4 weeks into the process and then say the loan can't move forward or something crazy like that. At least this way you'll know if you qualify upfront.

I hope this helps as well and feel free to add me and check out my interview on the Joe Fairless show earlier this year. The information is on my profile page.

After the RE crashed...all lenders are stricter in the approval process and Fannie Mae has new rules too. I'm constantly providing additional documents to my lender. I just got use to it.

Good Luck