Q
Everything was running smoothly in the financing of my buyers purchase, the Inspections were clear and the property appraised, but then close to the closing date the lender said there was a problem with the buyers Tax Transcript and it looks like the deal wont go thru.
Why does this happen?
A
The Tax Transcript is referred to by lenders as the 4506 form, it allows a lender to compare the borrowers filed Tax Returns with the Returns the IRS processed. If there is a significant difference between the borrowers Taxes given to the lender and the 4506 results, then the underwriter will flag or cancel the transaction. We order the 4506 upfront so there are no surprises down the road before closing, and you should ask the lender you are dealing with if they do the same.
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