Refi company asking for permission to view future tax forms

[Jay968]

What is the name of your state?California

Last night we signed docs to refinance our house.
There were 2 forms (4506-C and 4506-T) that we were required to sign giving the lender the right to look at our tax returns.
Of course, the person who brought us the forms was only a notary so she could not answer specific questions. So knowing that we have 3 days to review all documents and cancel the refi if we want, we went ahead and signed what we were asked to sign.

The issue is this: On both the above forms, we were asked to sign 2 copies each, one stating specific months and years, the other leaving this area blank. While I can see the need to ask us for specific dates for the processing of this loan, I don't understand why we were also asked to sign these docs with no dates specified. I fear that we may have given them a blanket OK to look at our tax returns at any time until the loan is paid off (possibly even beyond that). Even scarier is the thought that if we are both retired in the next few years, they will see that our incomes have changed and state that we no longer qualify for this loan. There are no documents anywhere that I can see where it says that they can ask us to pay in full or default if our incomes change, but it scares me as to why they may want to see our tax documents in say 7 years from now.

Does anyone know if this has become standard procedure? We were never asked to sign thee forms when refinancing in the past.
Is my thinking realistic or am I just being paranoid?

 

[quincy]

What is the name of your state?California

Last night we signed docs to refinance our house.
There were 2 forms (4506-C and 4506-T) that we were required to sign giving the lender the right to look at our tax returns.
Of course, the person who brought us the forms was only a notary so she could not answer specific questions. So knowing that we have 3 days to review all documents and cancel the refi if we want, we went ahead and signed what we were asked to sign.

The issue is this: On both the above forms, we were asked to sign 2 copies each, one stating specific months and years, the other leaving this area blank. While I can see the need to ask us for specific dates for the processing of this loan, I don't understand why we were also asked to sign these docs with no dates specified. I fear that we may have given them a blanket OK to look at our tax returns at any time until the loan is paid off (possibly even beyond that). Even scarier is the thought that if we are both retired in the next few years, they will see that our incomes have changed and state that we no longer qualify for this loan. There are no documents anywhere that I can see where it says that they can ask us to pay in full or default if our incomes change, but it scares me as to why they may want to see our tax documents in say 7 years from now.

Does anyone know if this has become standard procedure? We were never asked to sign thee forms when refinancing in the past.
Is my thinking realistic or am I just being paranoid?

All blanks should have been filled in.

 

[Jay968]

All blanks should have been filled in.

Well I did call the mortgage company and was told the same thing. But my concern was that someone could fill in some date at a future time.
She assured me that,
1 - This would be illegal (and luckily we have a copy of this form with the blank lines and our signatures because we had to redo it due to an error of signing on a wrong line) and
2 - These forms are only good for up to 60 days anyway, so we are protected from any future use of them.

 

[adjusterjack]

Is my thinking realistic or am I just being paranoid?

My guess is that your lender will get your tax records from the specified years and if not satisfied with the results could request earlier years.

I seriously doubt that the lender will be looking at your financial situation after the refi is completed.

 

[Jay968]

OK thanks. Thing is, the lender has already approved and finalized the loan (by signing, we closed last night), so I doubt they have a need to look at previous years. The rep I finally did speak with suggested that those forms without dates were in the packet merely as information.

 

[quincy]

Well I did call the mortgage company and was told the same thing. But my concern was that someone could fill in some date at a future time.
She assured me that,
1 - This would be illegal (and luckily we have a copy of this form with the blank lines and our signatures because we had to redo it due to an error of signing on a wrong line) and
2 - These forms are only good for up to 60 days anyway, so we are protected from any future use of them.

OK thanks. Thing is, the lender has already approved and finalized the loan (by signing, we closed last night), so I doubt they have a need to look at previous years. The rep I finally did speak with suggested that those forms without dates were in the packet merely as information.

It sounds as if the mortgage company adequately addressed your concerns. I wouldn’t worry.

 

[Jay968]

Thanks

 

[zddoodah]

I don't understand why we were also asked to sign these docs with no dates specified. I fear....

And yet, despite your stated fear, you signed them anyway....

Even scarier is the thought that if we are both retired in the next few years, they will see that our incomes have changed and state that we no longer qualify for this loan.

Not sure what you mean by this. If you qualify as of the date the loan is made, it doesn't matter if, at some point in the future, your situation becomes such that you would no longer qualify.

Does anyone know if this has become standard procedure?

This question raises no legal issue. You'd have to ask someone with expertise in home refinance lending.

Is my thinking realistic or am I just being paranoid?

Sounds more like the latter than the former.

 

[quincy]

Thanks

The form 4056-T actually includes with it general instructions that say “Do not sign this form unless all applicable lines have been completed.” It is always a good idea to read everything before signing any form.

That said, and despite assurances from your lender, you could always ask that the incomplete forms be returned to you if your refinance loan already has been approved and the mortgage lender has told you they were included in the “packet” for information purposes only. This should ease any remaining concerns you might have.

We appreciate the thanks, Jay968, so thank you.

 

[Zigner]

And yet, despite your stated fear, you signed them anyway....

California law allows a 3-day period to review the loan package. Had the OP so chose, they could have cancelled the loan. I don't see anything wrong with how it was handled.

 

[Jay968]

And yet, despite your stated fear, you signed them anyway....

Yes, we felt pressure to do so. I haven't described what we went through the past almost 3 months to get this done. We threatened to pull out of it several times due to delays. Knowing we have 3 days to review and change our minds, we decided to go ahead and sign since not doing so would probably delay things even more.

Not sure what you mean by this. If you qualify as of the date the loan is made, it doesn't matter if, at some point in the future, your situation becomes such that you would no longer qualify.

OK

This question raises no legal issue. You'd have to ask someone with expertise in home refinance lending.

OK here too, thanks.

Sounds more like the latter than the former.

 

[quincy]

California law allows a 3-day period to review the loan package. Had the OP so chose, they could have cancelled the loan. I don't see anything wrong with how it was handled.

I think the reassurances by the lender should be sufficient to ease any worry.

 

[Jay968]

The form 4056-T actually includes with it general instructions that say “Do not sign this form unless all applicable lines have been completed.” It is always a good idea to read everything before signing any form.

That said, and despite assurances from your lender, you could always ask that the incomplete forms be returned to you if your refinance loan already has been approved and the mortgage lender has told you they were included in the “packet” for information purposes only. This should ease any remaining concerns you might have.

We appreciate the thanks, Jay968, so thank you.

Yes we did read everything but there was no one who we could ask questions, so knowing we have 3 days, we signed.

 

[Jay968]

I think the reassurances by the lender should be sufficient to ease any worry.

Yes, thank you

 

[quincy]

Yes, thank you

It all seems to have worked out well for you if your refinance was approved.

And there really is no reason for the lender to care about your finances in the future as long as you continue to make the agreed upon payments.