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Is The Shutdown Slowing Mortgage Lending?

Is The Shutdown Slowing Mortgage Lending?
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Yes.  The government shutdown could derail mortgage lending and home-buying. Most mortgage lenders require the 4506-T IRS tax verification transcript and verification of the home-buyer’s Social Security number. With the IRS and the Social Security Administration closed due to the government shutdown, most home-buyers cannot get a hold of these documents, leaving most mortgage lending institutions at a standstill.

Furthermore, the Federal Housing Administration, which usually writes loans for low-income, first-time buyers, is operating with a very small staff and FHA loans require a sign-off from the agency.

As we all know, the real estate market and transactions are extremely time-sensitive, so any kind of delay to that timeline will have an adverse effect on both buyers and sellers.

Hopefully, the shutdown will not lead to another stalled housing market, but government officials should be concerned.

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Is The Shutdown Slowing Mortgage Lending? was last modified: November 1st, 2014 by Kevin Fallon McCarthy
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Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.
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