Government Shutdown – How will this effect mortgages?

With the midnight  deadline passing in Washington and a government shutdown in place many of you are wondering if this will cause problems for any mortgage transactions that are due to close during the shutdown. I have received a number of calls this morning with people asking this question.

The answer is that it is pretty much business as usual with a couple of minor delays

1.       The Fed is to remain open so there will not be any impediment for banks to wire money to fund closings.

2.       As part of the verification process lenders have to verify tax returns transcripts through the IRS. With the IRS closed we have taken the precaution of ordering these transcripts for any loans that are closing in the first week of October so this won’t cause any delays. We can continue to order them but the turn time will be slow.

3.       New FHA Case numbers cannot issued with the shutdown. This will only affect new loans. Appraisals cannot be completed until an FHA case number is assigned.

4.       There are a number of verifications that are done through government agencies that will be effected during the shutdown but precautions have been taken to insure our loans will close.

The bottom line is that this is not going to bring the mortgage industry screeching to a standstill.

If you have any questions please feel free to contact me