The IRS announced changes to the requirements for completing Form 4506-C, IVES Request for Transcript of Tax Return as well as a new version of the form. These changes are required to support the OCR, or Optical Character Recognition software, that the IRS will eventually utilize.
There will be unique handling requirements for Form 4506-C to ensure transactions are not delayed due to incorrect forms.
The new requirements are effective with orders placed with the IRS as of March 1, 2023. Homebridge will implement the following changes described below for Form 4506-Cs.
- Due to the extremely unique new requirements for the Form 4506-C, Homebridge will require that all transactions which require a processed transcript have the Homebridge Account Manager prepare an initial Form 4506-C for the borrower to sign. The Homebridge prepared version will be used in all instances to request the transcript
- Effective Wednesday March 1, 2023 the following will apply to all transactions which require a processed transcript:
- The Homebridge Account Manager will generate an initial Form 4506-C and send to the borrower, and
- A courtesy email will be sent to the Broker confirming that the Homebridge generated initial Form 4506-C was sent to the borrower for signature
- The Homebridge Account Manager will generate an initial Form 4506-C and will send the form via email to the NDC/EB to send to the borrower for signature, and
- The NDC/EB must return acceptable proof that the borrower has E-Consented (such as Certificate of Completion from DocuSign, Electronic Delivery Consent, or a document generated from the NDC/EB’s Loan Operating System which confirms the date the borrower E-Consented) when applicable, and
- The NDC/EB must return the signed Form 4506-C to the Account Manager via email, NOT through P.A.T.H
Initial Form 4506-C
Homebridge will continue to require Brokers and NDCs to provide an initial signed Form 4506-C with all loan submissions (all programs) excluding the below:
- Non-credit qualifying Streamlines and IRRRLs, and
- Simple Access Investor Cash Flow, Bank Statement, Asset Qualifier and P&L Only options
NOTE: P&L Only Simple Access transactions require an initial Form 4506-C only if co-borrower full documentation income used to qualify
Homebridge will accept the content on the version of the initial signed Form 4506-C the Broker or NDC provides at the time of submission. Homebridge will not request edits if the initial version is incorrect. In the event the initial version is not acceptable, and the transcript is required to be processed, the Homebridge Account Manager will send a Form 4506-C to the borrower for signature to ensure that the new requirements have been met to avoid delays.
As a reminder, Homebridge only requires transcript requests to be processed for limited transactions as follows:
- When randomly selected by Homebridge QC (Fannie Mae/Freddie Mac transactions, and FHA/VA credit qualifying transactions, if selected), or
- At the discretion of the Underwriter, or
- When required by the program as noted below:
- Jumbo AUS,
- Jumbo Elite,
- Simple Access Full Doc, 1099 Only, P&L Only (if co-borrower full documentation income used to qualify)
- All USDA options
Final Form 4506-C(s)
As a reminder, final Form 4506-C(s) are only required in the closing document set for the following transactions:
- Fannie Mae and Freddie Mac,
- FHA and VA credit qualifying,
- Jumbo AUS,
- Jumbo Elite,
- Simple Access Full Doc and 1099 Only, P&L Only (if co-borrower full documentation income used to qualify), and
- All USDA options
Homebridge will handle the Final Form 4506-C as follows:
- Brokered Transactions:
- Homebridge will send the required Final Form 4506-C(s) with the closing documents
- NDC/EB Transactions:
- Effective with files Cleared to Close March 1 2023 and later, the Homebridge Underwriter will prepare and send the required final Form 4506-C(s) at the time the CTC is issued
- Homebridge will require the NDC/EB to use the Homebridge provided version of the final Form 4506-C for signature in the NDC/EB’s closing document set due to the unique requirements
4506-C Form and Reference Materials
Since Homebridge will provide customers with 4506-C Forms for borrower signature as a result of these changes, we have retired both the 4506-C Individual Taxpayer Quick Reference Guide and the 4506-C Business Returns Quick Reference Guide from the Homebridge website.
If you have any questions, please contact your Account Executive.