Updated about 17 years ago on . Most recent reply
Income verification for mortgage qualification.
A professional gambler friend of mine wants to buy a house. Since he is self-employed, the only records of his income are his annual IRS forms.
He's planning to present forms with enlarged figures for his annual income to obtain a mortgage.
We had a discussion about this, with me feeling that this is risky. I thought I'd heard in the past that this is a Federal crime (submitting false info to get a loan).
He told me that there is no way of verifying these forms, short of subpoenas to get the records from the IRS.
I felt that this is probably the worst time to try something like this, as I'm sure there's been increased scrutiny.
His argument is that due to his profession he doesn't feel he'll be accepted for a mortgage, especially at this time. He keeps his funds primarily liquid and/or has them deposited in unconventional places (sportsbooks, pokerrooms). Yet he tells me that he can easily put up 20% (or more if necessary), and will have no trouble making the monthly payments.
Can anyone in the real estate/mortgage field help to settle our argument, or anyone with direct experiences on either side of the counter?
What verification if any is done?
He was told by a broker that he'd have to bring his 2 most recent annual IRS forms. Is this the norm?
Thanks for all responses.