For our loans on NOO cash flow properties, we have been requesting on an annual basis the customers tax returns so we can re-analyize their cash flows on the subject property each year. This was not a written condidtion in our agreements years ago, but we have included it as a condition of the loan for the last few years.
We often end up receiving generally the, PFS's, schedule E's of the subject properties, or a self made, or accountants prepped P/L statement. Seasoned customers, and some who simply do not care because it is not expressly written in our agreement, who did not have this condition have generally blown us off.
So upon a recent examiner visit, they made it very clear that we need to be obtain the FULL tax returns of these peeps annually.
So then:
Where is it stated that we need to obtain full annual tax returns on these customer? Is there a guidance that we are missing? Is their an interpretation we are not understanding?
Are there any exemptions for seasoned customers where we have not had any payment issues with their loans for say the last 10-15 years?
If we have not conditioned for it in the past, what teeth do we have to get it now? Simply saying because the FDIC says so is not going to phase these people.
Suggestions and guidance are appreciated.
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