The Rich Haney Group, Government Shutdown and Mortgage Loans After yesterday’s speech by Obama & Boehner we thought it might be useful to have an update on how the government temporary shutdown may/may not affect the real estate business. First, look at the temporary shutdown as more of a gov’t slim down because for the most part, lenders are operating business as usual. Here are a few key points: •
Right now USDA is completely shut down. Expect delays even after they reopen.
Tax return verification. Since the IRS is closed, we cannot verify that someone’s tax returns are authentic. However, that is not stopping lenders. We are closing FHA, VA & Conventional loans without verifying tax returns with the IRS. Lenders are just assuming the risk that a borrower is not trying to commit fraud.
The Social Security Administration is closed. However this won’t impact most transactions unless discrepancies surface in the documentation we collect from the borrower. For Example, the social security numbers on W2’s don’t match the social on the tax returns.
VA is on a slight slimdown but nothing that is causing any delays. It’s business as usual.
FHA is on a big slimdown. However their online automated systems are running and it’s business as usual. We order case numbers online, underwrite the loans ourselves, close them and then insure FHA loans “after” closing. This does not and should not affect closings at all. The only problem with fha might occur if you have a unique situation that requires talking to someone at FHA. Such as transferring an FHA case number from one lender to another.
Thanks to William Roseberry with Primary Residential Mortgage for helping us with this question. Feel free to give us a call or email if you have any questions. The next big date coming up is October 17th, when the gov’t maxes out its credit card limit and has to decide whether or not to increase the debt ceiling.