Age Of Tax Return Requirements And Form SSA-89

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Guide AnnouncementIssue Date03/10/21Effective DateAs NotedGA2021-007Age of Tax Return Requirements and Form SSA-89PurposeThis announcement includes the following topic: Requirements Transcripts Self-employed Income SSA-89 version 12-2020RequirementsPer Freddie Mac Bulletin 2021-2 to help ensure that the most recently filedtax returns are obtained and analyzed when determining Borrower’s stablemonthly income, the following specificity has been given: The most recent federal income tax return is the last tax return,individual and/or business, that was filed with the IRS by theBorrower, and, if applicable, the Borrower’s business. It is alwaysencouraged to confirm with the Borrower that the tax returnsprovided are the tax returns most recently filed with the IRS Stable monthly income must be determined, which may requireadditional documentation and analysis At a minimum, the following date and documentation requirementsmust be met, based on the Application Received date and the Notedate of the mortgage (See Table on following page)Continued on next pageGA-2021-007This communication is intended for use only by mortgage professionals and business partners ofFirst State Mortgage Services, LLC.Page 1 of 5

Guide AnnouncementIssue Date03/10/21Effective DateAs NotedGA2021-007Age of Tax Return Requirements and Form SSA-89, ContinuedTax TranscriptsIRS confirming verifying transcripts are not yet available for the prior calendaryear are always recommended and, in certain instances, are required, asshown above.Continued on next pageGA-2021-007This communication is intended for use only by mortgage professionals and business partners ofFirst State Mortgage Services, LLC.Page 2 of 5

Guide AnnouncementIssue Date03/10/21Effective DateAs NotedGA2021-007Age of Tax Return Requirements and Form SSA-89, ContinuedSelf-employedThe following guidance has been provided in determining continued incomeincome stability stability when the most recent calendar year of business and/or individual taxwhen taxreturn(s) is not yet available:returns are older If the Borrower’s federal individual and/or business income taxreturns for the most recent calendar year, or fiscal year as applicable,are not available (e.g. Borrower and/or Borrower’s business filed anIRS extension or tax returns are not yet filed with the IRS), examplesof factors and documentation to consider when using older taxreturns to determine continued income stability include, but are notlimited to, the following: Business review and analysis of current business activitythrough a review of the most recent financial statement(s)that cover the period since the last tax return filing(s) Business review and analysis of current business activitythrough a review of at least the most recent three months ofbusiness bank statements Signed IRS Form 941, Employer’s Quarterly Federal Tax Return,for the prior calendar year and current calendar yearquarter(s) that support wages and other compensationdocumented on the most recent business tax return Review of tax liability reported with IRS tax filing extension(s)(e.g. IRS form 4868, IRS form 7004) to determine consistencywith tax liability reported on prior year(s) tax return(s) Review of W2’s, 1099s and/or K-1s from the most recentcalendar year, if available.Continued on next pageGA-2021-007This communication is intended for use only by mortgage professionals and business partners ofFirst State Mortgage Services, LLC.Page 3 of 5

Guide AnnouncementIssue Date03/10/21Effective DateAs NotedGA2021-007Age of Tax Return Requirements and Form SSA-89, ContinuedSelf-employedincome stabilitywhen taxreturns areolder, continuedIf the continued stability of the income cannot be determined, then theBorrower’s federal individual and/or business income tax returns from themost recent calendar year may need to be obtained to make thedetermination.Note: The information above is guidance only; it does not contain newrequirements. The existing requirement to determine income stability hasnot changed. The expanded guidance consists of potential steps that may behelpful to ensure continued income stability when the tax returns are older.This guidance does not replace the COVID-19 temporary requirements inBulletin 2020-44; the requirements and guidance remain in effect untilfurther notice.ReminderFinancial statements for the business may be used to assist in evaluating anddetermining various components of self-employment analysis, including, butnot limited to, business liquidity, income stability when tax returns are onextension, evaluation of a newer business and the impact of business fundwithdrawals.SSA-89 Version12-2020The Social Security Administration (SSA) has published a revised version ofForm SSA-89 (12-2020), authorization for the SSA to release Social SecurityNumber (SSN) Verification.FSM will require this document in loan files with applications dated June 1,2021 but can start using immediately.Continued on next pageGA-2021-007This communication is intended for use only by mortgage professionals and business partners ofFirst State Mortgage Services, LLC.Page 4 of 5

Guide AnnouncementIssue Date03/10/21Effective DateAs NotedGA2021-007Age of Tax Return Requirements and Form SSA-89, ContinuedEffective DateAs NotedQuestionsRetail – Please contact your Manager with any questionsMod Corr – Please contact Brent Wilder, National Account Executive, atbwilder@fsmloans.bizGA-2021-007This communication is intended for use only by mortgage professionals and business partners ofFirst State Mortgage Services, LLC.Page 5 of 5

Mar 10, 2021 · SSA-89 Version 12-2020 The Social Security Administration (SSA) has published a revised version of Form SSA-89 (12-2020), authorization for the SSA to release Social Security Number (SSN) Verification. FSM will require this document in loan files with applications dated June 1, 2021

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