Posted by Jeremy Wilstein on Thursday, October 3rd, 2013 at 1:36pm.
The situation in Washington is starting to effect real estate financing throughout the country. While loan processing is still operational, the IRS closure is creating issues with lenders who are required to obtain a tax transcript from the IRS to approve a home loan. Ed Knapp and Jeremy Wilstein begin the October 2013 Smart Buyer Alert webinar with an update on the current events happening in Park City. Later in the presentation Greg Cutt with Guaranteed Rate Mortgage joins the presentation to describe exactly how the shutdown is effecting the approval of home loans.
- Here are the main points regarding the government shutdown.
- Fannie Mae, Freddie Mac, FHA and VA are still operational, so these types of loans can be done.
- USDA is shut down, so the Rural Housing Loan product is not available.
- Even though Fannie, Freddie, FHA and VA are operating, there may still be issues with getting these loans closed, because the IRS is closed. The reason this impacts mortgages is all lenders are required to send a request to the IRS to obtain tax transcripts from the IRS confirming the numbers on the tax returns the borrower provides to the lender. Since the IRS is closed, lenders cannot obtain the transcripts from the IRS. Normally, loans cannot close with these transcripts. Some lenders are trying to come up with solutions to work around this issue, but other lenders have stated they will not close loans without the transcripts.
- If you are currently working with a lender, it is important to check with your lender to find out if your loan will be impacted.