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Government Shutdown May Slow Mortgage Funding

Mortgage News > Government Shutdown May Slow Mortgage Funding
Date: 10/02/2013    Government Shutdown May Slow Mortgage Funding

The current government shutdown may have an adverse effect on the rate at which mortgages are funded. The duration of the shutdown is what will determine its effect due to the fact that with each mortgage application borrower tax records are requested.  If the IRS is unavailable to respond to a request for more than a week or so “that is where the holdup occurs” says Don Frommeyer, President of the National Association of Mortgage Brokers in USA Today.

Additional loan derailments stem from protocol with FHA Loans. The U.S. Housing and Urban Development announced they will have what they call a “limited staff” thus causing a delay in funding loans.  However, some of the nation’s larger lenders will be able to continue funding FHA loans because they have been given the authority to do so.  According to HUD roughly 80% of FHA loans are funded through lenders with that authority.