Government Shutdown Impacts The Mortgage Industry From Multiple Sides
The government shutdown is at 23 days and counting and the ripple effect that has come from it is quite impactful. The mortgage lending industry, banks and credit unions have found themselves struggling in the midst of the shutdown.
According to a recent report from National Mortgage News, mortgage applications had been backlogged from December 22, 2018. Luckily, the Trump administration deemed personnel who helped process the 4506-T Form as necessary and they were able to return to work.
Previously, mortgage professionals were being forced to close loans without the form that ensures IRS income verification. That's not all, the mortgage industry also felt the blow on another end.
"The FHA has also stopped assisting financial institutions in underwriting loans," according to the report.
"That move mostly doesn't hurt larger lenders that use the FHA's automated underwriting system, but it is potentially causing delays for smaller banks, credit unions and other lenders."
The NMN report also has a complete breakdown of additional sectors that have been affected by the government shut. You can read them all by clicking on the image above.