The Mortgage Bankers Association (MBA) has backed an announcement by the Internal Revenue Service (IRS) that it will soon begin allowing electronic signatures on Form 4506-T, Request for Transcript of Tax Return. The IRS has indicated it expects to begin accepting electronic signatures on the 4506-T in January, 2013. The tax return transcript, which enables lenders to validate a borrower’s reported income, is required in virtually all mortgage loan originations, as well as loan modifications. The acceptance of electronic signatures on the request form will reduce paperwork requirements for lenders and borrowers, and should speed the process for closing or modifying a loan.
“The current process for requesting a borrower’s tax return transcript is labor intensive and time consuming,” said MBA President and CEO David H. Stevens. “With this announcement, the IRS is making this process much easier and more efficient. As anyone who has purchased or refinanced a home can attest, the volume of paperwork involved can be quite burdensome. Allowing for electronic signatures will save time and reduce the likelihood of errors or loss of documents. This is a win for consumers and lenders alike.”
MBA has long advocated for the IRS to accept electronic signatures on Form 4506-T and has worked closely with the IRS on this and related initiatives. MBA will continue to work closely with the IRS to ensure a smooth implementation process.