U.S. Government Shutdown Threatening Housing Recovery
A U.S. government shutdown will immediately slow approval of
thousands of mortgages. If it lasts more than a week, it threatens housing and
the broader economic recovery. Congress forced the first partial government
closure in 17 years after failing to pass a budget, meaning borrowers in the
process of obtaining home loans could be delayed as lenders are blocked from
verifying Social Security numbers and accessing Internal Revenue Service tax
transcripts. The process may also lengthen the wait for borrowers seeking
approval for mortgages backed by the Federal
Housing Administration because its
fulltime staff is now less than a tenth of its normal size and the U.S.
Department of Agriculture, which backs mortgages in rural areas, won’t
take on new business during the shutdown. The shutdown comes as construction
and new housing sales are climbing back from the worst financial crisis since
the Great Depression.
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