The current government shutdown is causing numerous problems, including the funding of home loans. The lending process involves several items that require government assistance. Due to the current government shutdown, certain process are unavailable. Here is how this affect lending....
The following will provide you with a breakdown of the different lending items that are affected by the government shutdown:
Tax Transcripts (4506 forms)
The majority of lenders these days are requiring tax transcripts to be acquired prior to a loan funding. However, due to the government shutdown, these transcripts are unavailable. We work with several lenders who are still allowing us to fund loans, even without transcripts! We will obtain the transcripts once the service is again available.
Social Security Number Verification
On occasion, DU (computer underwriting system) requires lenders to verify the borrower’s Social Security Number with the Social Security Administration (SSA). Due to the government shutdown, this SSA service is unavailable. Loans where SSA verification is needed and cannot be obtained will not be cleared to close until the government shutdown is ended and verification can be obtained.
Verification of Employment (VOE) for Government Employees
The government shutdown means employment verifications cannot be obtained for government employees. Loans with qualifying income from a government employee where a VOE cannot be obtained prior to closing will not be cleared to close.
There will be no delay with FHA loans due to the shutdown (unless one of the above issues applies). FHA Case #’s are still accessible despite the shutdown, so we can still fund FHA loans!
HOW YOU CAN USE THIS:
If you have clients purchasing a home or refinancing their current home loan, you can prepare them for these possible issues. Government employees should know that their home purchase could be delayed. It is important to be aware of how your client's loans might be affected if you are depending on that transaction for your purposes.
If you have any questions on how the government shutdown affects your clients, please feel free to contact us...we’re here to help!