Will the Government Shutdown Impact for Sacramento Home Mortgages?
The impact on personal home mortgages will grow if the shutdown is long. The biggest impact is the IRS.
The Internal Revenue Service (IRS) has indicated that they will not process any forms, including issue tax return transcripts (Form 4506 T), should a government shutdown occur. Without tax transcripts, loan processing may be delayed, depending on individual housing agency requirements and aggregator guidelines.
The Department of Housing and Urban Development’s (HUD) operations, specifically the Federal Housing Administration (FHA), should not be significantly impacted as long as the shutdown is brief. In a document issued September 27, 2013 HUD indicated:
What services will be available during the shutdown?
• FHA will be able to endorse single family loans during the shutdown, however, only a limited
number of FHA staff will be available to underwrite and approve new loans, so the process
may take longer.
• Lenders will be able to obtain an FHA case number from the FHA Connection.
• CAIVRS will be available to determine if a borrower has a delinquent federal debt.
• FHA Total Scorecard will be available.
• Limited FHA staff will be available to respond to questions and emails.
The Department of Veterans Affairs (VA) will continue to operate if there is a government shutdown, which means lenders will be able to continue originating VA-guaranteed loans. Both lenders and borrowers will be able to obtain their Certificate of Eligibility online and they will still be able to submit applications and follow up on COEs.
USDA, Rural Development Plan for Operations in Absence of Appropriations or shutdown. USDA will cease all but essential functions and no new loans or guarantees will be made.
The Social Security Administration (SSA) may not be available for verification of borrowers’ social security numbers. Lenders rely on either third party vendors or the Social Security Administration (SSA) for verification. In previous shutdowns, SSA has only retained employees that deal directly with the processing of new claims and benefits; therefore lenders may not be able to continue to verify social security numbers through SSA.