MORTGAGE NEWS: HOW THE SHUTDOWN IS AFFECTING THE PROCESSING OF NEW LOANS:FROM THE MORTGAGE BANKERS ASSOCIATION:
Dear MBA Member,
As Congress continues to negotiate legislation to fund the federal government in FY2014, federal agencies are preparing for the possibility of a government shutdown when the current continuing resolution expires at midnight on Monday, September 30, 2013. If the House and Senate are unable to resolve their differences by the midnight deadline, there will be a shutdown that will furlough certain federal employees and cause a significant curtailment of operations at several federal agencies.
It is difficult to quantify all of the impacts of a government shutdown. However, lenders processing loans that need tax transcripts, social security number verification, or FHA loans, should anticipate delays and reduced functionality from HUD, IRS, and the Social Security Administration. A shutdown lasting a few days would slightly inconvenience lenders in processing loans, however a longer delay would have more serious impacts. Purchase loan volume could shrink and impede the recovery of the housing market. Additionally, long-term furloughs may disrupt time-sensitive mortgage transaction deals by interfering with borrower lock agreements and causing interest rate disparities from the time of closing to the time the loan is securitized.
Compliments of Buck Denton, Heritage Mortgage (404-459-2949) and Danette O’Neal Realtors (504.365.7325/ 770-981-1999).