October 3rd, 2013
Tidewater Home Funding President/CEO, Kim S. Curtis, provides insight into the current home loan industry during the government shutdown in Sarah Kleiner Varble's October 3rd article in The Virginian-Pilot.
Lenders are able to process most loans - whether they are endorsed by the Federal Housing Administration or U.S. Department of Veterans Affairs, or purchased by Fannie Mae and Freddie Mac. The one exception applies mostly to rural areas: Loans issued by the U.S. Department of Agriculture will not be available.
Some loans may take longer to process.
And lenders may be wary of approving loans because some of the safeguards that were put in place after the housing bubble burst have been suspended during the shutdown, said Kim Curtis, president and CEO of Tidewater Home Funding.
The Internal Revenue Service is not releasing tax returns, which are typically required to be used by lenders to verify documents submitted by the borrowers.
Applications can be processed without tax returns, Curtis said. But if information on the application was incorrect, the borrowers no longer qualify, and the lender - not the government - takes on the risk of the loan.
"It hasn't crippled us, but it's too soon to tell," Curtis said.
Will Morrison, CEO of Monarch Mortgage, said it may be harder now for federal employees to get loans because their employment and income status are not stable. And if consumers are worried about their jobs or that the tenuous recovery of the housing market is in jeopardy, loan applications may decrease.
"This needs to end as quickly as possible because I think it affects people's psyche," Morrison said.
Sarah Kleiner Varble, 757-446-2318, firstname.lastname@example.org