As the first government shutdown in nearly 20 years marches on, the Mortgage Bankers Association’s (MBA) David Stevens is urging lawmakers to consider the impact that an ongoing shutdown will have on the housing market.
Stevens, president and CEO of the trade group, pointed out that while furloughs are currently impacting the out-of-work government employees the most, the effects of a long-term crisis are sure to spread.
“Lenders processing loans that need tax transcripts, social security number verification, or FHA [Federal Housing Administration] loans face longer delays and reduced functionality from HUD, IRS, and the Social Security Administration,” Stevens said.
“Different loan programs have different requirements, and these disruptions impact lenders in different ways, leading to confusion and fear among borrowers about whether they will be able to close on a home purchase or refinance,” he added.
Multifamily lenders can also expect to feel some of the fallout, as rental housing properties awaiting FHAfinancing will not be able to move forward, he said.
What’s more, the furloughs also threaten time-sensitive mortgage transaction deals by interfering with borrower lock agreements and causing interest rate disparities from the time the loan is closed to the time it is securitized.
“For these reasons there must be a resolution so that borrowers and lenders are able to return to business as usual,” Stevens concluded.