Lucho Posted January 10, 2009 Report Share Posted January 10, 2009 How would you fix this error? As a mistake, one of my client's address on the 2007 return is whowing the prior address (address where he llived renting before buying a house. Now that he is in trouble paying the monthly installment for the house, he has requested a mortgage modification payment. The people working on his request (the mortgage modification) want to see this house address on the return. The only logical and professional way to fix this problem that I think of is amending the return showing the new address. I am open to listen to your comments. He has being told that if the house address does not show it in the return, that will be considered a red flag as he is not living in the house but renting it. Thank you in advance Lucho Quote Link to comment Share on other sites More sharing options...
jainen Posted January 10, 2009 Report Share Posted January 10, 2009 >>that will be considered a red flag<< It does seem kind of red. The first thing is to ask him straight up if it is true. If he is not actually living there, he needs to abandon this scheme and come up with a new plan because the mortgage company WILL send a real live investigator to knock on the door and see who answers. He must have plenty of ID with his correct address. Bills, bank statements, love letters, UPS packing slips, drivers license, memberships and registrations of any kind. Give it all to them. Quote Link to comment Share on other sites More sharing options...
Lucho Posted January 10, 2009 Author Report Share Posted January 10, 2009 Thank you Jainen. He lives in the house but I think there is another person in the title and that may be the problem. My concern now would be how to fix my own mistake. I have being preparing his return and also his children for several years, unfortunately I did not change the address on his. Thank you again, and good morning Lucho Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted January 10, 2009 Report Share Posted January 10, 2009 File the notice to change address. Quote Link to comment Share on other sites More sharing options...
jainen Posted January 10, 2009 Report Share Posted January 10, 2009 >>there is another person in the title<< The mortgage company knows all about the title. They are asking about who is USING the house and for what purpose, i.e., is it actually your client's primary residence. To rewrite the mortgage will no doubt require a credit application from the co-owner. >>My concern now would be how to fix my own mistake.<< Frankly, I don't see it that way. From the point of view of the client, the mortgage company, or the co-owner, some one-time clerical error would not be the main concern. By the way, how did your client manage to get his stimulus check last year? Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted January 10, 2009 Report Share Posted January 10, 2009 If he provided you the correct address last year, and it was your error that you did not change the address on the tax return, I would probably offer to write a letter to the mortgage company on my letterhead explaining that. I would think that they would take this as an explanation for the discrepancy, and move on to other ways of checking that this is actually his primary residence. I would also file the 2008 return as early as possible to correct the address with both federal and state taxing authorities, assuming you are in a state with an income tax. Other than this, I don't think there is much you can do, unless you follow RoyDaleOne's advice and file the change of address notice with IRS and provide a copy of that to the mortgage company. Quote Link to comment Share on other sites More sharing options...
Lucho Posted January 10, 2009 Author Report Share Posted January 10, 2009 Thank you, everybody. Now I now how to proceed. Quote Link to comment Share on other sites More sharing options...
jainen Posted January 11, 2009 Report Share Posted January 11, 2009 >>write a letter to the mortgage company on my letterhead explaining that<< That is terribly risky, even foolish. If the bank grants credit based on your independent assertion that the client had signed his tax return in error, they can hold YOU responsible for the balance should he default. If you must write a letter, address and send it to the client. Even that won't satisfy your E&O carrier, and if you don't have insurance--well, shoot, why are we even thinking about this? And really, what good is a letter anyway? The bank has specific requirements for loan docs that are set by FNMA and other secondary market players. If he uses alternative docs, he will get bumped into a whole different category of mortgage. In case you haven't been reading the news this year, lenders are on the ropes for handing out money without proper documentation. Only work with standard records to back up the loan app if at all possible. "Fixing" something is often a bigger red flag than the original mistake. So far, lucho, you haven't mentioned a single document that supports his position. And what's up with the co-owner? Ask the loan officer for help; he gets nothing unless he can close the deal. Quote Link to comment Share on other sites More sharing options...
Lucho Posted January 11, 2009 Author Report Share Posted January 11, 2009 >>write a letter to the mortgage company on my letterhead explaining that<< That is terribly risky, even foolish. If the bank grants credit based on your independent assertion that the client had signed his tax return in error, they can hold YOU responsible for the balance should he default. If you must write a letter, address and send it to the client. Even that won't satisfy your E&O carrier, and if you don't have insurance--well, shoot, why are we even thinking about this? And really, what good is a letter anyway? The bank has specific requirements for loan docs that are set by FNMA and other secondary market players. If he uses alternative docs, he will get bumped into a whole different category of mortgage. In case you haven't been reading the news this year, lenders are on the ropes for handing out money without proper documentation. Only work with standard records to back up the loan app if at all possible. "Fixing" something is often a bigger red flag than the original mistake. So far, lucho, you haven't mentioned a single document that supports his position. And what's up with the co-owner? Ask the loan officer for help; he gets nothing unless he can close the deal. Thank you again Jainen. I will have a meeting with the taxpayer. Quote Link to comment Share on other sites More sharing options...
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