Despite prior reports to the contrary, the Federal Housing Administration will not stop processing loan applications as a result of the government shutdown that began earlier this week. Instead, the U.S. Department of Housing and Urban Development (HUD)’s Office of Single Family Housing will continue to endorse new loans “in order to support the health and stability of the U.S. mortgage market,” according to its latest contingency plan.
Internal Revenue Service (IRS)
The IRS is closed and has suspended the processing of all forms, including requests for tax return transcripts (Form 4506T). 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 if the shutdown is protracted. We have received indications that 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. On loans requiring a Form 4506T Fannie Mae and Freddie Mac have also adopted relaxed provisions allowing closings but subject to tax transcript verification before the GSE’s purchase the loans.
Source: GBAR
Sandy LeRette – Realtor® ABR – Better Homes & Garden Real Estate / The Masiello Group – 436 Amherst Street, Nashua, NH 03063 cell: (603) 661-7301 email: slerette@masiello.com
Bob LeRette – Div. Sales Manager/ Real Estate – Boston.com & The Boston Globe, 617-929-2104 email: robert.lerette@globe.com
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