As everyone knows, this morning our government shut down. But how does this impact the average person? Well, I know that my 9-year-old son who was planning on visiting a National Park tomorrow is disappointed that his field trip is cancelled. However, that is minor inconvenience compared to the potential impact on the real estate and mortgage industry. The length of the shutdown will be the key factor in determining how this will impact the mortgage and real estate industry. If it is only a 4 or 5 day shutdown then the effect will be a minor inconvenience. If it stretches out to two or three weeks then the impact will broaden. This is some information from our lender partner, United Lending.
The primary adverse effect on the mortgage and real estate industry at this point will be the inability of any lender to obtain a 4506 T from the IRS and to verify a borrower’s social security numbers during the government shutdown. Loans without a 4506 T and verified Social Security numbers will not be able to close.
If the shutdown is brief then this should have little effect on HUD. They will continue to endorse single family loans, FHA Connection will be up and running so we will be able to obtain case numbers, CAVIRS will be functional, and the FHA Total Scorecard will be available.
The shutdown at this point will have very little impact on the VA. For the time being, it should be business as usual with the VA.
At this point, USDA loans are a question mark. United Lending is reaching out to several field offices to see how they plan to respond to this. United Lending has “heard” they may allow loans with CTC’s issued from the USDA to close, but we have not confirmed this. Please stay tuned on this.
United Lending is waiting to hear from FEMA as to whether or not they will continue to issue Flood Insurance.
The Federal Reserve aka wire transfers will not be impacted by this government shutdown.
For more information, please contact Silvia Ward, United Lending (512) 592-5455. Click here for more information on homes in Austin.