Since CUNA’s compliance staff compiled a list of changes in mortgage interest reporting under the IRS’s Form 1098, several questions have arisen. CUNA’s compliance staff has been able to connect with a coalition of consumer mortgage lenders to find some answers.
The changes to Form 1098 stem from the signing into law of last year’s Surface Transportation Act. It stipulates that additional information must be included in the form, and it must be present on forms issued to credit unions members after Dec. 31.
The added information that will be required is:
Several questions have been asked about the amount of outstanding principal at the beginning of the year. Per CUNA staff, this amount can be reported as the principal balance as of Jan. 1, 2016.
The balance does not have to be amended if, for example, payments are made later in the month, or if a payment is returned.
If a loan has not been originated as of Jan. 1, or if a line of credit has not been drawn down, the balance would be left black.