I am working on a short sale where the husband (not on the mortgage, not on title, non- owner occupied property, not liable, and doesn't want to get involved) has excellent income ...  The wife is unemployed and has been a homemaker for the past 4 years.  Taxes were filed as married, filing jointly, with no income at all reported by the wife.  She applied for a short sale, and the bank asked for tax returns (as usual).  We sent a letter of explanation, that she has no W2's and hasn't worked at all.  So now the bank has asked for a 4506 T (obviously...they have to...) which I am providing.  The big question is, would you give them the tax returns, even though she had no income?  (IRS will give them the returns, anyway...) or would you let things run their course???  Thanks for your input, Superstars!

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Mesare. My experience is that the lenders consider family income. They will need tax returns. So either they seller provides them or they will get them form the IRS. Not much difference is there? The husband is involved. He married the borrower.

Imagine... and we are not even in a "community state"...  Well, looks like it's time to pray (again!!!!)  : )

Personally I would only give them financial information for the person or person(s) responsible for note as that is the only income they used when they made the loan.

Thanks, Kevin...  Yeah, good advice... 

I just closed a Short Sale with the exact same senario.  My seller (the wife and only one on title) wrote a letter stating she had no income and therefore filed no tax return for herself.  She and only she signed the 4506T.  My problem was that the sellers had not filed a tax return for over 5 years and she could not provide anything to the lenders.  They accepted this document and moved on and approved the short sale.  The seller owed $932,000 between the first and second and the deal was closed for over $300,000 less than owed.  Just have your seller explain her situation in a brief statement.  Just for information the first was a major lender and the junior lien was a HELOC .

Great, Linda... I'm happy it turned out this way for you...  We'll see what happens with our client...

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