Impact of Government Shutdown on Mortgages

A quick mortgage update as the Government Shutdown reaches Day 4.

Most lenders are not missing a beat getting loans closed. Everything is mostly business as usual with Fannie Mae, Freddie Mac, FHA, and VA. None of these agencies are closed. The main problem area right now is with USDA loans. If the USDA loan was already approved, it should be able to close without issue. Otherwise, not looking good to close one of these until the shutdown is over. Although FHA is not closed, FHA multi-unit purchase loans also pose a big potential problem for some reason, but these loans are very rare.

The most threatening problem area this week has been obtaining necessary tax transcripts from the IRS, which are required on most every loan. Fortunately, most lenders have obtained a special waiver to NOT have to get these transcripts during the shutdown. As a result, some extra verification steps will be required on some loans, but this should not be much of an issue or cause a delay.

The only other issue on radar screen is an employee who works directly for a department impacted by the shutdown. The underwriter could have some big income questions that might not be able to be resolved until the shutdown is over.

Bottom line is so far, so good with little impact on the mortgage business.

October 4, 2013 by · Leave a Comment

About James

James A. Williamson is currently the Sr VP of Sales Development for Shelter Lending Services (formerly Fairfield Mortgage). James joined Shelter in 1994 and was the company's top Loan Officer in GA for 20 straight years helping over 2500 families finance their homes. James now oversees an incredible group of Loan Officers in Atlanta while further building Shelter's Atlanta business.

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