FNMA Tightens IRS 4506T Tax Transcript Requirements

In an effort to stem the tide of mortgage fraud associated with misstated income, Fannie Mae announcement 09-19 tightens the requirements regarding the use of IRS tax transcripts to verify mortgage borrower income.

FNMA now “highly recommends” that 4506-T transcripts be obtained from the IRS (or designee) for the transaction prior to closing and is used to validate the income documentation provided by the borrower and used in the underwriting process.

Effective, September 1, 2009, Fannie Mae requires all lenders to:

  • Obtain from the borrower(s) a completed and signed Form 4506-T at both loan application and closing.
  • Include the execution of Form 4506-T to the lender’s written quality control plan.
  • Verify that all loans selected for quality control review, whether under the random or discretionary sampling include, in addition to all current requirements, the execution and reconciliation of the transcript information with the income documents in the loan file.

These requirements have caused a significant increase in the number of lenders requiring brokers and correspondents to include executed 4506T transcripts with every loan package.

Credit Technologies is an authorized IRS designee and IVES (Income Verification Express Service) provider. Tax return, W-2 and 1099 transcripts are typically available in about 24 hours. More information is available at or call 800.445.4922.

Fannie Mae Memo 09-19 can be read in its entirety at https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0919.pdf

Thomas Conwell

President and founder, Credit Technologies, Inc. Past President/Director National Consumer Reporting Association (NCRA.)