Where readers ask, and we (the community) try to answer (in the comments below, so don’t be shy):
“For the past 12 months, all our attempts to refi to lower the rate to 5.25 or better have fallen short. Many times, it starts great – then stops short when reaching the line that says I don’t work regardless of any other financial info. (2 borrowers = 2 jobs for more than 24 months each)
We have found a broker that is ok to attempt a refi – but he’s asking for “Copies of 2007 and 2008 W2’s and 1040 Federal Tax Returns (all pages and schedules)”
Although I understand where this request comes from (and I agree that lax practices created the current mess) I’m extremely concerned about giving our most intimate and private information away.
From my point of view, there is absolutely no justification for disclosing to a loan officer:
– all details of all the medical bills.
– all details of fertility treatment, adoption, abortion and other family expenses and whatever items that can be listed.
– all details about your nanny and other children care expenses.
– all details about your religious life – who you gave to, and how much
– all details about your political life – who you supported and how much
– all details about your off shore bank accounts, details about your children college accounts, and other private stashes of money,
– a complete copy of your foreign tax returns
The broker was adamant that banks are not accepting 1040 with ANY data missing, pages missing, lines blacked out….
If I understood correctly, an application including the authorization for the release of the Feds records (4506-T) – but missing OUR voluntary copy of the tax return won’t be accepted either (something we would have – somehow – agreed to).
The broker wouldn’t even understand why I agree to disclose this info to our accountant and to the Feds – and refuse to give it to several banks/lenders.
And so we get to my questions….
1. What is the legal ground for such a request – and is there a way to work with that type of requirement?
2. What are the legal protections against misuse of information – like personal retaliation (someone [posting] your info online or somewhere else?) – or even plain discrimination (loan officer doesn’t appreciate your political support on prop 8, or refuses to loan to an HIV positive couple?)
3. How much is my information worth? Where is the threshold when the savings is more important than my privacy?
Any information you or your readers can provide would be much appreciated.
[A Regular Reader]”