David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA), issued the following statement in reaction to the government shutdown and its affect on the housing market. “The federal government shutdown will have a growing impact on the housing market the longer it continues. If this shutdown is temporary, the ones affected most will be out of work federal employees. However the longer it goes, the greater impact it will have on borrowers, the housing market and the national economy.
“Lenders processing loans that need tax transcripts, social security number verification, or FHA home loans face longer delays and reduced functionality from HUD, IRS, and the Social Security Administration. 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. There are significant impacts on multifamily lenders, as well. Rental housing properties awaiting FHA financing cannot move forward.
“The furloughs can disrupt time-sensitive mortgage transaction deals by interfering with borrower lock agreements and causing interest rate disparities from the time of closing to the time the loan is securitized.
“For these reasons there must be a resolution so that borrowers and lenders are able to return to business as usual.”