Annapolis, MD (PRWEB) October 15, 2013
Foreclosure experts from UShud.com released findings today that indicate the government shutdown is slowing down the home buying process.
The two primary government agencies that could have the greatest impact on the real estate market are the Internal Revenue Service (IRS) and The Department of Housing and Urban Development (HUD). As the shutdown continues, the likelihood of disruptions to the home buying process increase. These delays may occur even after the government reopens, depending on how long the close down continues.
There is concern that the IRS will be unable to fulfill requests for tax records of potential borrowers when the lender initiates the request. Though this step in the lending process is performed early, it will likely become a problem the longer the government remains closed.
“The fear is that the IRS will not be able to provide the required tax information in a timely manner. The practice of cross referencing tax records is mandatory in order to secure a mortgage and there is no other place to get this information other than the IRS.
If the government were to prolong the shutdown for any further than this week we could see delays in the home buying process, which could also affect the buyers mortgage rate,” said a spokesman for USHUD.com.
“Each borrower must have their taxes checked against the IRS records to insure the reported income is the actual income and that process is performed before the closing of escrow. There are only a few weeks before we start seeing trouble on this issue but homebuyers must be prepared,” said the spokesman.
The shutdown could also affect The Department of Housing and Urban Development, which insures millions of mortgages each year through the Federal Housing Administration (FHA). Most major mortgage lenders such as Wells Fargo and Citibank are able to fund FHA insured loans without the need to receive approval from the FHA. However, if the loan was generated by a broker or smaller local lender, the funding for the mortgage could be delayed if the government doesn’t open this week.
Both Republicans and Democratic leaders continue to hint that a deal to reopen the government is very likely. However, until the government is open or at least there is a deal on the table, USHUD.com does not advise making any non-refundable deposits on moving companies, truck rentals or any other financial commitment that is contingent on a mortgage being funded.
Headquartered in Annapolis, Maryland, UsHUD.com is part of Heavy Hammer, Inc., an online networking and consulting company advocating for American homebuyers, connecting them with trusted experts and valuable resources.