We have a mortgage loan applicant who brought in his tax return and a hand-written listing of property he owns where he says he collects rent or land contract amounts monthly. He provided this to use as proof of income. We cannot reconcile his income from the property list to his taxes. Even if we had used the questionable income, there was not enough income to make the loan and it was denied. My question is "do we have information where an SAR needs to be filed due to not being able to reconcile the income shown on the taxes compared to his hand-written document"? Is this a false statement on application or real estate fraud? Do we have any obligation since we didn't make the loan.

Any advice would be helpful. Thanks.

Did he provide you with all of the Schedule E's (assuming they're held personally)? Did you validate the tax forms with a 4506-T? If so, how far off was each figure on Line 3 (Rents Received)?

His rents on Line 3 are not anywhere close to what he has given us on his hand-written sheet. Would the amount used for the SAR be the amount of the loan request?

Yes.