Update: One Bank Gets It - Wells Fargo

After running into roadblock after roadblock on trying refinance our home in the post 2010 IRS tax publication 555 ruling, my mortgage broker finally came back with good news. It turns out Wells Fargo is much more progressive than other banks, and one alternative we have to refinance our house. It's sad because I've already spent close to $1,000 on refinance costs with another bank that I won't recoup if we have to switch banks to complete our refinance.

But here's the good news, in a letter Wells Fargo sent out to their loan agents:

The IRS mandated effective with 2010 1040 returns that registered domestic partners must each report half the combined community income earned by the partners.

If you have a W2 wage earner borrower and the his/her domestic partner is not on the subject loan in order to use all of the W2 wages the borrower earned then the following documentation is required.

· Borrower’s 2010 1040 that supports 50% of W2 wages claimed and notation on the 1040 domestic partner claimed other 50% wages (If borrower has filed 2011, which I would be surprised as of this date, should include those along with the 2010).

· Operations will need to obtain the W2 from the IRS using the 4506-t in order to validate matches the W2 statement provided by the borrower.

· Operations still obtains the tax transcript and that should always match the 1040 (no difference in process with this step).

At least one bank gets it.