Why is including a 4506-T form important when submitting a loss mitigation package?

Why is including a 4506-T form important when submitting a loss mitigation package?

• A. It verifies the client's income
• B. It authorizes the servicer to obtain the client's tax returns
• C. It confirms the client's residence history
• D. It provides the servicer with the client's bank statements

Answer: (B)

Including a 4506-T form in a loss mitigation package is crucial because it authorizes the servicer to obtain the client's tax returns from the IRS. This form is a request for transcript of tax return, which allows the servicer to verify the information provided by the client regarding their income and financial situation. Since accurate income verification is essential in assessing the client's eligibility for loss mitigation options, the 4506-T facilitates this process by providing access to official tax documents that may reaffirm or clarify the client's declared income. Having access to these tax returns through the 4506-T form ultimately helps the servicer make informed decisions regarding the loss mitigation strategies that can be offered, such as loan modifications or repayment plans. By ensuring that the income data is consistent and trustworthy, this form plays a critical role in fostering transparency and accountability in the loss mitigation process.

Including a 4506-T form in a loss mitigation package is crucial because it authorizes the servicer to obtain the client's tax returns from the IRS. This form is a request for transcript of tax return, which allows the servicer to verify the information provided by the client regarding their income and financial situation. Since accurate income verification is essential in assessing the client's eligibility for loss mitigation options, the 4506-T facilitates this process by providing access to official tax documents that may reaffirm or clarify the client's declared income.

Having access to these tax returns through the 4506-T form ultimately helps the servicer make informed decisions regarding the loss mitigation strategies that can be offered, such as loan modifications or repayment plans. By ensuring that the income data is consistent and trustworthy, this form plays a critical role in fostering transparency and accountability in the loss mitigation process.