The 4506 is an IRS form used by lenders to obtain a copy of a borrower's tax return. Borrowers sign these forms at closing.
Mortgage lenders have quality control programs that perform routine audits. If your file is selected for an audit they will submit the 4506.
Audit selection may be random or not. If a mortgage lender suspects fraud they may tag your file for an audit. Random auditing is typically 10% of all closed files.
Really good quality control programs randomly select not only 10% of all production but they make certain they are checking 10% of each originator's production, 10% of each appraiser's work, etc.
A really good quality control program will catch crooks. They are easy to spot if you are really looking for them.
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