I can’t believe I’m writing this post but yes, the government is shut down…..so we do need to know how this will impact real estate. It’s primary on the loan side of things. Here are the two most relevant impacts it will have to people buying or selling a home in Colorado right now during the shutdown period.
Internal Revenue Service (IRS) – Tax Return Transcripts Unavailable
The IRS is closed and has suspended the processing of all forms, including requests for tax return transcripts (Form 4506T). Lenders use these to verify borrowers ACTUAL taxes filed match the copies the provided at loan application. While FHA and VA do not require these transcripts, they are required by many lenders for many kinds of loans, including FHA and VA, so delays can be expected. Many loan originators are adopting revised policies during the shutdown, such as allowing for processing and closings with income verification to follow, as long as the borrower has signed a Form 4506T requesting IRS tax transcripts.
Social Security Administration (SSA) – Can’t Verify Social Security #’s For Borrowers
The Social Security Administration is closed and has suspended most customer service functions. According to the SSA Contingency Plan, verifying Social Security numbers through the Consent Based SSN Verification Service will also be suspended during the shutdown. Many lenders are choosing to still approve the loan subject to subsequent verification once the SSA is up and running.
Loans will still be processed and approved but may take longer. Be patient. Be proactive with your lender. Be in constant communication. Questions or thoughts give me a shout. My info is at the top right of this page. Mike